On April 18, 2025, Hanwha Aerospace announced a significant adjustment to its capital procurement strategy, opting for a third-party allocation rights offering valued at 1.03 trillion won (approximately $800 million). This decision was made during a board meeting where the company resolved to target three entities: Hanwha Energy, Hanwha Impact Partners, and Hanwha Energy Singapore.
The funds being raised through this rights offering are part of a broader financial strategy that initially included a total capital raise of 3.06 trillion won. However, Hanwha Aerospace has decided to reduce the scale of the shareholder allocation rights offering to 2.03 trillion won and replace the remaining 1.03 trillion won with this third-party allocation.
According to Hanwha Aerospace, the funds being returned to the company were originally paid to the three entities in February 2025 as part of the sale of shares in Hanwha Ocean. This maneuver is seen as a way to resolve the ongoing controversy surrounding the potential use of these funds as succession capital for Kim Seung-yeon, the chairman of Hanwha Group, and his three sons.
Under this new arrangement, Hanwha Energy is set to invest 123.6 billion won, Hanwha Impact Partners will contribute 888.1 billion won, and Hanwha Energy Singapore will invest 288.3 billion won. The rights issue price is set at 758,000 won per share, with no discounts being offered for this particular allocation.
Shareholders participating in the existing shareholder allocation rights offering, however, will have the opportunity to purchase shares at a 15% discount from a price that will be determined later. This discount aims to provide additional incentives for smaller shareholders and enhance their value.
Hanwha Aerospace emphasized that this rights offering is a commitment to responsible management and small shareholder protection. "This decision is a measure to comply with the promise to the market of 'completion of the 1.03 trillion won original return within April' and to enhance shareholder value," a Hanwha official stated.
Despite facing scrutiny from the Financial Supervisory Service, which had previously requested corrections to Hanwha Aerospace's securities registration statement, the company is moving forward with its rights offering. The funds from this offering are expected to be paid by April 28, 2025, with the corresponding shares scheduled to be listed on May 15, 2025. A one-year protection deposit will be applied to these shares following their listing.
In a show of confidence in the company's future, approximately 90 executives, including Vice Chairman Kim Dong-kwan, recently purchased around 122 billion won worth of shares in Hanwha Aerospace. This move is part of a broader effort to restore market confidence and address concerns over the succession funding controversy.
Hanwha Group has reiterated its commitment to transparency and responsible governance as it navigates these financial adjustments. The group aims to provide clarity and reassurance to its investors amidst the ongoing discussions surrounding its capital structure and succession plans.
As the market looks on, the implications of Hanwha Aerospace's decisions will likely resonate beyond the immediate financial outcomes, shaping perceptions of corporate governance and responsibility within one of South Korea's leading conglomerates.
In conclusion, Hanwha Aerospace's strategic adjustments reflect a calculated effort to stabilize its financial footing while addressing shareholder concerns and the sensitive issue of succession funding. The upcoming rights offering marks a pivotal moment for the company as it strives to maintain investor trust and navigate the complexities of its corporate landscape.
