Hanwha Solutions, one of South Korea’s leading energy and chemical companies, sent shockwaves through the financial markets on March 26, 2026, as its stock price plummeted by over 18% in afternoon trading. The sudden drop followed the company’s announcement of a massive rights offering, aiming to raise nearly 2.4 trillion KRW (about $1.8 billion USD) to shore up its finances and invest in next-generation solar technology. The move, while intended as a lifeline for the embattled firm, has stirred a heated debate among investors, market analysts, and policymakers about the company’s strategy, governance, and the broader implications for South Korea’s capital markets.
The drama unfolded quickly. According to CBC News, Hanwha Solutions’ stock began to tumble sharply after 2:30 p.m., triggering two Volatility Interruptions (VI) within minutes—a clear sign of panic selling. By the close of trading, shares had fallen to 36,850 KRW, down 18.11% from the previous day. Some outlets, including EBN and Hankyung, reported the stock finished at 36,800 KRW, marking an 18.22% plunge. The sell-off capped a week of mounting anxiety, as the stock had already dropped roughly 30.7% from 51,700 KRW on March 20, with the initial spark coming from a March 24 shareholders’ meeting that approved raising the company’s authorized share count from 300 million to 500 million—a move widely interpreted as a precursor to the capital increase.
At the heart of the issue is Hanwha Solutions’ decision to issue 72 million new common shares, representing a 42% increase in its outstanding shares. The rights offering will be conducted in two stages: existing shareholders and the employee stock ownership association will have priority in late June, followed by a general public offering for any unsubscribed shares. The par value is set at 5,000 KRW per share, with a proposed offering price of 33,300 KRW—20% below the reference price. The final price will be locked in on June 17, 2026, with new shares set to list on July 10.
Why such a drastic move? Hanwha Solutions’ financials tell a sobering story. As reported by EBN and Newsfield, the company has been reeling from a downturn in both its solar and chemical divisions. Despite posting 13.3 trillion KRW in sales in 2025, it suffered an operating loss of 364.8 billion KRW and a net loss of 650.4 billion KRW. The previous year was even worse, with a net loss of 1.3689 trillion KRW. Over two years, cumulative losses have nearly reached 2 trillion KRW. The company’s total liabilities ballooned to 21.9 trillion KRW, pushing its debt ratio close to 190%. Financial costs alone hit 539.4 billion KRW in 2025, and the threat of a credit rating downgrade loomed large.
Hanwha Solutions executives, including CFO Jeong Won-young, were candid about the urgency. In a conference call covered by Yonhap Infomax, Jeong explained, “If our credit rating is downgraded, the refinancing burden on maturing bonds over the next two years could reach up to 1.8 trillion KRW.” He added, “To defend our credit rating and secure resources for financial improvement and future growth, we concluded that a rights offering is the optimal solution.” The company aims to deploy about 1.5 trillion KRW of the proceeds to repay maturing bonds, commercial papers, and loans, thereby reducing the consolidated debt ratio below 150% this year and managing net borrowings at around 9 trillion KRW. The long-term target is a debt ratio of 100% and net borrowings of 7 trillion KRW by 2030.
But Hanwha Solutions isn’t just plugging holes—it’s betting big on the future. Around 900 billion KRW from the rights offering will be invested in next-generation solar technology, specifically perovskite tandem cells, which promise higher efficiency than traditional silicon-based solar cells. The company is allocating 100 billion KRW to build a pilot line and 800 billion KRW to ramp up gigawatt-scale production capacity and expand TOPCon cell output. Executives told investors they expect mass production of perovskite tandem cells by 2029, targeting double-digit profitability. By 2030, Hanwha Solutions is aiming for 33 trillion KRW in sales and 2.9 trillion KRW in operating profit, signaling a bold transformation toward high-efficiency, high-output products to regain leadership in the global solar market.
Still, the market’s reaction was swift and unforgiving. Investors are worried about dilution—the new shares will significantly reduce the value of existing holdings. Critics, as reported in Newsfield, also point to Hanwha Solutions’ governance and executive compensation practices. CEO Kim Dong-kwan, who also serves in executive roles across five Hanwha affiliates, has come under fire for receiving annual compensation of 2.7 to 3.1 billion KRW and being granted nearly a million RSUs (Restricted Stock Units) between 2020 and 2025, despite the company’s ongoing losses and suspended dividends. The RSUs are convertible to shares by 2035, raising further concerns about dilution and the concentration of power within the owner family. Some investors accuse management of focusing on unprofitable solar ventures at the expense of more lucrative defense businesses, and of repeatedly resorting to capital increases that sap market confidence.
These frustrations are not occurring in a vacuum. The South Korean government, under President Lee Jae-myung, has been pushing for stronger shareholder protections and better corporate governance. At a recent meeting, President Lee declared, “The core reason for the ‘Korea Discount’ in our stock market is corporate governance and abuse of management rights.” The government is considering measures such as strengthening directors’ fiduciary duties to shareholders and mandating share buybacks, hoping to boost the so-called “Korea Premium.” Hanwha Solutions’ move to expand its authorized share capital is seen by many as running counter to these reforms.
In an attempt to placate shareholders, Hanwha Solutions rolled out a new five-year shareholder return policy. The company pledged to allocate 10% of consolidated net income to dividends or share buybacks, with a minimum guaranteed dividend of 300 KRW per share, regardless of earnings. The policy is meant to reassure investors that their interests are being considered, even as the company navigates a challenging turnaround.
Yet, skepticism remains. Credit rating agency NICE Investors Service noted that while the rights offering will ease Hanwha Solutions’ financial burden, “the immediate improvement in debt-servicing capability may be limited, given the company’s weak profitability.” The agency also indicated it would closely monitor the commercial viability and profitability of Hanwha’s U.S. solar manufacturing operations.
Major shareholder Hanwha Corporation, which holds 36.3% of Hanwha Solutions, has announced plans to participate fully in the rights offering, signaling institutional support. But retail investors remain wary, with many expressing frustration in online forums about recurring capital increases and perceived “owner risk.” The prevailing sentiment is one of mistrust—toward both the company’s leadership and its long-term vision.
As Hanwha Solutions embarks on this high-stakes capital raise, the outcome will serve as a litmus test for the company’s ability to execute its turnaround plan, restore investor confidence, and adapt to a rapidly changing energy landscape. The coming months will reveal whether this bold bet on solar innovation and financial restructuring can deliver the promised results—or whether further turbulence lies ahead for one of Korea’s industrial giants.