Hanwha Ocean has succeeded in raising nearly 1.5 trillion won through a paid-in capital increase, gaining momentum for its new defense and offshore wind power businesses.
Hanwha Ocean recently raised a total of 1.4971 trillion won through a paid-in capital increase conducted with the employee stock ownership association, existing shareholders, and a public offering. The subscription rate for the capital increase was about 135%. Hanwha Ocean initially planned a paid-in capital increase in the 2 trillion won range, but the scale of the public offering funds was reduced due to a drop in stock price.
Hanwha Ocean has carried out two paid-in capital increases worth trillions of won this year. Earlier in May, Hanwha Group affiliates injected 2 trillion won to improve Hanwha Ocean’s financial structure. While the previous capital increase focused on improving the financial structure, this recent capital increase aims to secure investment funds for new businesses. Paid-in capital increases, which increase the number of new shares and dilute stock value, often raise doubts about stock prices or corporate management. Moreover, the newly issued shares in this capital increase amount to 89,485,500 shares, equivalent to 41% of Hanwha Ocean’s existing listed shares. Due to this atmosphere, some raised concerns about the possibility of failure, but Hanwha Ocean succeeded in its second capital increase this year. The market seems to have endorsed Hanwha Ocean’s transformation.
With the capital injection, Hanwha Ocean has completed preparations for expanding new businesses. Of the funds secured this time, 570 billion won will be used for facility investment. Additionally, 207.1 billion won will be allocated for operating funds, and 720 billion won will be used to acquire securities of other companies. The focus is on automation and digitalization of the existing shipbuilding business, as well as overseas expansion of special ships and offshore wind power businesses.
So far, shipbuilders’ sales have been concentrated in the merchant ship sector, accounting for about 90%. Hanwha Ocean aims to break this structure and diversify its portfolio. It plans to compete in the global market beyond Korea in the special ship sector, including submarines and warships. Due to geopolitical crises and increased defense budgets, the global warship market size is expected to reach approximately 986 billion dollars (about 1,320 trillion won) cumulatively over the next 10 years.
Hanwha Ocean is also entering the energy business centered on offshore wind power generation. The plan is to produce everything from offshore wind turbine installation to power supply and green hydrogen (hydrogen produced from renewable energy) using wind energy. The equity investment amount for expanding the offshore wind power business was recently increased from the initial 200 billion won to 300 billion won.
The company is looking for overseas base business sites to acquire for new businesses. Hanwha Ocean stated, "The acquisition of securities of other companies will be used entirely for overseas business expansion such as M&A (mergers and acquisitions)." The company is considering acquiring local shipyards to enter the overseas defense and offshore wind power markets. Philly Shipyard, which owns a yard in Philadelphia, USA, is a strong candidate.
Hanwha Ocean plans to expand the proportion of new businesses such as offshore wind power and special ships to 41% of sales by 2040.
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