FSS "Hanwha Aero's 3.6 Trillion Won Capital Increase Under Intensive Review"

The Financial Supervisory Service (FSS) has decided to conduct a focused review on the rights offering of Hanwha Aerospace, following Samsung SDI. This decision was made considering that the amount reaches a record high of 3.6 trillion KRW and that it is the first rights offering since 1999.

On the 20th, the FSS stated, "We plan to conduct a focused review on Hanwha Aerospace's rights offering," adding, "We will closely examine whether important information necessary for investment decisions is thoroughly disclosed, and resolve market uncertainties through a prompt review process."

Hanwha Aerospace announced on the same day that it will proceed with a rights offering worth 3.6 trillion KRW to secure funds for future growth engines. Through this, the company aims to establish overseas land-based defense, shipbuilding & marine, and marine defense bases to leap into a top-tier position in the global defense, shipbuilding & marine, and aerospace sectors.

The FSS previously announced a concentrated review system for rights offerings, selecting those subject to focused review based on major categories such as ▲concerns over stock value dilution ▲concerns over infringement of general shareholders' rights ▲excessive financial risk ▲negligence of underwriters' duty of care, along with seven subcategories. Samsung SDI was selected as the first subject of focused review under this system.

In cases of rights offerings subject to focused review, the justification for the rights offering, decision-making process, board of directors' discussions, and shareholder communication plans will be intensively examined. To enhance predictability of the review, the focused review will be conducted within one week of submission, and at least one face-to-face consultation will be held.

Lee Bok-hyun, Governor of the FSS, said, "The 3.6 trillion KRW rights offering for new investments in Hanwha Aerospace's defense business is the largest in the history of the Korean market," adding, "Given the overall economic slowdown, it is meaningful that a company has made an investment decision amid uncertainty." He also said, "Ultimately, companies can easily raise funds if they can secure financing in the public offering market," and added, "We view this very positively and will review it as quickly as possible."

The FSS plans to deploy maximum review capabilities, including short-term focused reviews and face-to-face consultations, to enable the company to promptly raise funds according to its planned schedule. It also added that it views positively the fact that the company is pushing forward this rights offering to raise funds necessary to establish a leading position in 'K-Defense' amid expanding external uncertainties such as the recent strengthening of protectionist trends. Amid criticism that the FSS might be wielding its licensing authority against listed companies conducting rights offerings, Governor Lee also mentioned at a briefing the previous day that "we view Samsung SDI's investment case positively."