Acquiring All 1.62 Million Allocated Shares
Securing Funds Through Cash on Hand and Financial Procurement
"Enhancing Shareholder Value and Fulfilling Major Shareholder Responsibilities"
Hanwha will participate in the paid-in capital increase of its defense industry affiliate Hanwha Aerospace. Hanwha is the largest shareholder, holding 33.95% of Hanwha Aerospace's shares.
On the 26th, Hanwha held a board meeting at the Hanwha Building in Jung-gu, Seoul, and approved participation in the shareholder allocation paid-in capital increase of Hanwha Aerospace. Hanwha will acquire 1,620,298 new shares allocated to the company according to its shareholding ratio at 605,000 KRW per share. The issue price is subject to change and is expected to be finalized on May 29. Based on the current price, the total amount is approximately 980.3 billion KRW, and Hanwha plans to secure funds through cash on hand and financial procurement. The scheduled stock acquisition date is June 12.
Kim Seung-mo, CEO of Hanwha, said, "We agree on the need for bold investment in Hanwha Aerospace and will participate in the paid-in capital increase to enhance Hanwha's shareholder value through the growth of our subsidiary and to fulfill the responsibilities of the major shareholder."
Earlier, on the 20th, Hanwha Aerospace decided on a paid-in capital increase worth 3.6 trillion KRW. Son Jae-il, CEO of Hanwha Aerospace, and An Byung-chul, President of the Strategy Division, along with other top executives, decided to purchase company shares worth 4.8 billion KRW. Other executives will also voluntarily participate in stock purchases to enhance the future value for all shareholders, including minority shareholders. At the shareholders' meeting held the day before, CEO Son explained, "To overcome the 'European defense bloc' and the competition from advanced countries' defense companies, rapid large-scale local investment is urgently needed," adding, "To manage debt ratios for overseas bids and make large-scale investments in a short period, a paid-in capital increase is the optimal solution."
However, criticism remains regarding the sudden decision to launch a mega capital increase that could harm shareholders, despite expectations of additional operating profits in the 6 trillion KRW range over the next two years. Moreover, on the 13th, Hanwha Aerospace acquired a 7.3% stake in Hanwha Ocean, a company with high control by the family of Chairman Kim Dong-kwan of Hanwha, for 1.3 trillion KRW. Just a week after this acquisition, the market raised suspicions that the decision to proceed with the mega paid-in capital increase under the pretext of investment prioritized the interests of the controlling family over those of all shareholders.
Since changing its name from Hanwha Techwin to Hanwha Aerospace in April 2018, Hanwha Aerospace has continued to grow. Riding the wave of a defense boom, it recorded a record-high operating profit of approximately 1.7 trillion KRW last year. Its stock price has recently risen by an average of 210% annually, closing at 654,000 KRW on the 25th.
Through this 3.6 trillion KRW paid-in capital increase, Hanwha Aerospace plans to achieve sales of 70 trillion KRW and operating profit of 10 trillion KRW by 2035. This paid-in capital increase will be conducted through a shareholder allocation followed by a general public offering of unsubscribed shares. The record date for new share allocation is June 24, with subscription for existing shareholders scheduled for June 3?4, and the general public subscription period for unsubscribed shares from June 9?10. The new shares are expected to be listed on June 24.
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