Hanwha REITs Confirms Sponsor Participation in Paid-in Capital Increase: "Uncertainty Resolved"

Hanwha Asset Management announced on the 1st that Hanwha Life Insurance and Hanwha General Insurance have confirmed their participation in the paid-in capital increase promoted by Hanwha Entrusted Management Real Estate Investment Company, Ltd. (Hanwha REITs).

According to Hanwha Asset Management, the asset management company (AMC) of Hanwha REITs, Hanwha Life Insurance and Hanwha General Insurance have each decided to invest 21.59 million shares and 28.73 million shares, respectively, in the paid-in capital increase promoted by Hanwha REITs. The shares acquired by the two companies account for approximately 46.18% of the total 109 million shares in the paid-in capital increase conducted by Hanwha REITs.

Once the paid-in capital increase is completed, Hanwha Life Insurance is expected to hold about 31-32% and Hanwha General Insurance 16.0% of Hanwha REITs’ shares. In addition, Mirae Asset Global Investments, Koramco Housing & Urban Fund REITs, and Kyobo Life Insurance will also be major shareholders.

Since financial affiliates of the 'sponsor,' Hanwha Group, will absorb nearly half of the total paid-in capital increase volume of Hanwha REITs, uncertainty regarding the participation of major shareholders in the capital increase has been resolved, drawing attention to future stock price trends. Due to the impact of the paid-in capital increase promotion, Hanwha REITs’ stock price fell to the 3,700 won range as of the closing price on October 31.

Hanwha REITs recently announced at a REITs investment briefing hosted by the Korea REITs Association that it plans to pay an annual dividend of 270 won after the paid-in capital increase. Assuming entry at the closing price on October 31 and a simple calculation, investors can achieve a dividend yield of about 7.2%, which Hanwha Asset Management explains means that a price range suitable for potential investors interested in listed REITs investment has arrived.