Hanwha Aerospace to Raise 3.6 Trillion KRW in Capital Increase... Expanding Investment in Defense, Shipbuilding, and Aviation

Hanwha Aerospace announced a paid-in capital increase worth 3.6 trillion KRW on the 20th to secure future growth engines.

Hanwha Aerospace held a board meeting on the same day and resolved to proceed with a paid-in capital increase of 3.6 trillion KRW. Through this, the company aims to secure overseas ground defense, shipbuilding and marine, and marine defense bases to take a step forward as a global top-tier player in defense, shipbuilding and marine, and aerospace industries.

K9 Self-Propelled Howitzer. Hanwha Aerospace

Hanwha Aerospace will conduct the paid-in capital increase through a general public offering of forfeited shares after allocation to existing shareholders. Among the newly issued shares, 20% will be allocated to the employee stock ownership association. Existing shareholders can subscribe to approximately 1 new share for every 10 shares they hold.

The expected new share issuance price, applying a 15% discount rate, is 605,000 KRW. The issuance price will be finalized by calculating the first and second issuance prices based on trading volume and transaction value by April 24 and May 29, respectively. After the subscription process, the new shares are expected to be traded starting June 24.

Specifically, Hanwha Aerospace plans to use 1.6 trillion KRW of the secured funds for investments in overseas ground defense bases such as establishing local factories and equity investments for defense cooperation. This is because, due to geopolitical tensions and countries’ defense strengthening policies, defense spending and demand for ground weapon systems such as air defense, artillery, and armored vehicles are expected to steadily increase.

Since cooperation models that require local production investment rather than simple weapon purchases are preferred in regions such as Europe and the Middle East, Hanwha Aerospace plans to actively respond by securing local production bases.

Hanwha Aerospace will strengthen localization strategies so that next-generation core product lines such as the Cheonmu multiple launch rocket system, Redback armored vehicle, air defense systems, and ammunition (propellant charges) can establish themselves as the second and third K9 self-propelled howitzers in these regions, following the existing global bestseller K9 self-propelled howitzer.

Of the funds secured through the paid-in capital increase, 900 billion KRW will be invested in domestic propellant (MCS) smart factory facilities and major defense business site equipment and operations. This is to further strengthen the role of domestic business sites as global R&D hubs and key factories alongside the expansion of overseas production bases for ground defense.

Hanwha Aerospace also plans to invest 800 billion KRW to secure overseas marine defense and shipbuilding production bases centered on the United States. Additionally, 300 billion KRW will be invested in engine development facilities for unmanned aerial vehicles.

Meanwhile, following the announcement of the paid-in capital increase, the stock price plunged in after-hours trading after the regular market closed.

Hanwha Aerospace shares were traded at 673,000 KRW in after-hours trading at 5:10 PM, which is 6.79% (49,000 KRW) lower than the regular market closing price of 722,000 KRW on the same day.