South Korea’s Hanwha Aerospace Co. will buy a 20 percent stake in Satrec Initiative (SI), a local satellite system developer, for 58.9 billion won ($53.8 million) as part of efforts to step up its aerospace business.

Hanwha Aerospace`s board approved a plan to buy 1,817,120 shares of SI at 58.9 billion won. The company will pay all cash for the stake and plans to finalize the stake purchase on April 30, Hanwha Aerospace said in a regulatory filing on Wednesday.

Shares in SI closed Wednesday down 6.31 percent and Hanwha Aerospace 1.49 percent lower on Wednesday.

SI was founded in 1999 by KAIST (Korea Advanced Institute of Science and Technology) engineers who developed Korea’s first satellite. It specializes in developing high-performance small and medium satellite systems for Earth observation missions.

It is the only private company in Korea and one of just three local entities with the technology to build a proprietary satellite system, along with KAIST university and Korea Aerospace Research Institute.

The acquisition is part of Hanwha Group’s efforts to seek new engines for growth. Chairman Kim Seung-yeon, in his New Year’s address, urged the company to explore new business opportunities in areas such as mobility, aviation, space and green energy.

Hanwha’s aviation and military defense units include Hanwha Corp., Hanwha Aerospace, Hanwha Systems Co. and Hanwha Defense Co.

Hanwha Aerospace was formerly Samsung Techwin, which Hanwha acquired from Samsung in 2015.

By Lee Yu-sup and Song Gwang-sup

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