A statement from unlisted Korea Heavy said the firm's president Yoon Young-suk met with GE chairman and chief executive officer Jack Welch and discussed the deal. Korea Heavy, in talks with a GE delegation, would visit South Korea to negotiate the details of the deal, the statement said.

Korea Heavy, which also specialises in manufacturing ship engines and industrial plant equipment, already has a contract to supply GE with $22 million worth of electricity generation equipment, it said.

A spokesman for Korea Heavy was unable to confirm local media reports that GE had expressed its intention to purchase a 20 per cent stake in Korea Heavy from state-run electricity provider Korea Electric Power Corp.