The Financial Supervisory Service (FSS) has once again put the brakes on Hanwha Aerospace's rights offering. Although Hanwha Aero revised its plan by reducing the size of the capital increase to 2.3 trillion won, the FSS's repeated request for corrections is expected to inevitably affect the fundraising schedule.
On the 21st of last month, when Hanwha Group stocks plummeted together following Hanwha Aerospace's decision on a large-scale paid-in capital increase, the stock prices of Hanwha and Hanwha Aerospace were displayed on the Yonhap Infomax screen in Jongno-gu, Seoul. Photo by Yonhap News
On the morning of the 17th, the FSS requested Hanwha Aero to submit a corrected report through the electronic disclosure system. Accordingly, the effective date of the securities registration statement, originally scheduled for the 23rd, will also be postponed.
Previously, Hanwha Aero announced a 3.6 trillion won rights offering last month, and on the 27th of the same month, the FSS requested the submission of a corrected report, citing insufficient persuasiveness regarding the necessity of the rights offering, shareholder communication procedures, and the purpose of fund usage. Subsequently, Hanwha Aero significantly reduced the size of the rights offering to 2.3 trillion won and supplemented the contents before submitting it on the 7th of this month. The corrected report included additional explanations about the background and timing of the controversial acquisition of Hanwha Ocean shares.
However, the FSS judged that the corrected report still lacked specificity and was insufficiently detailed, thus requesting a second correction. An FSS official explained, "Just before submitting the corrected report, the company changed the fundraising structure by pursuing third-party allotment, so we judged that it was necessary to add the impact on shareholders and the company, which is why we requested another correction," adding, "The shareholder communication plan also needs to be supplemented."
In this regard, Lee Bok-hyun, the head of the FSS, also stated on the 10th, "Information necessary for investors and stakeholders to make judgments must be sufficiently recorded," and "The newly submitted securities registration statement will be subject to strict principles."
Due to the FSS's second correction request, Hanwha Aero's fundraising schedule is also expected to be delayed. The FSS plans to closely review whether the requested corrections have been fully reflected once the company submits the corrected report.
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