The sale of Korea Aerospace Industries is expected to be delayed to next year as the two leading presidential candidates both came out against the “hasty” privatization of the nation’s sole aircraft maker, industry sources said on Sunday.

The likelihood of a delay increased after the state-run Korea Finance Corp., which has led the sale of a 41.75 percent stake in KAI, announced last week that it would extend the due diligence period to Dec. 7 from the original deadline of Nov. 29.

The decision was made as the two bidders for the multi-billion dollar deal ― Korean Air and Hyundai Heavy Industries ― requested more time to conduct on-site inspections hampered by resistance from KAI’s labor union members.

Under the new timetable, final bids are scheduled to be accepted until Dec. 17. A preferred bidder for the estimated $1.1 billion deal is due to be announced two or three days later.

Despite the KFC’s determination to privatize KAI within this year, skepticism about the sale of KAI within this year is spreading because of opposition to a rushed privatization of the company from the presidential candidates.

The sale of KAI has emerged as a major issue in Sacheon, South Gyeongsang Province, where the KAI headquarters and factory are located, as local residents believe its privatization would hamper the city’s long-cherished goal of becoming a hub of the nation’s aerospace industry.

Ruling party presidential candidate Rep. Park Geun-hye said she opposed the “hasty” sale of KAI by the end of this year, adding that it would take more time to evaluate the effect of the deal on the advancement of the nation’s aerospace industry and on the economic development of South Gyeongsang Province. Park, in principle, supports the privatization of KAI.

Park’s rival Moon Jae-in from the main opposition Democratic United Party is against the privatization of KAI, arguing that policy development for the aerospace industry should come first.

“The timing is not positive for the sale of KAI. M&A deals are not binding to political issues in general, but it might be difficult for the state-run KFC to ignore the stance of the two strong presidential candidates on the deal,” an industry watcher said.

By Seo Jee-yeon  (jyseo@heraldcorp.com)