The stock price of Hanwha Aerospace is fluctuating due to setbacks in its large-scale paid-in capital increase plan. As it was the largest scale in the Korean market, it was an inevitable situation for existing shareholders' equity to be diluted. Because of this, the stock price jumped as soon as the market opened but later reversed and fell. Since Hanwha Aerospace stated that it would diligently respond to the actions of the FSS, the possibility of the capital increase being canceled is low.
On the 28th, Hanwha Aerospace's stock rose to 677,000 won, up 14,000 won from the previous day's closing price during early trading. As time passed, the increase narrowed, and as of 9:42 a.m. on that day, it was trading at 656,000 won, down 1.06% from the previous day.
The previous day, the FSS rejected the securities registration statement containing Hanwha Aerospace's paid-in capital increase plan. The FSS evaluated that, "As a result of closely reviewing the registration statement of Hanwha Aerospace through face-to-face consultations, the communication procedures with shareholders and the purpose of fund usage were insufficiently documented."
Companies like Hanwha Aerospace must pass a review by financial authorities to carry out paid-in capital increases. For this reason, Hanwha Aerospace plans to revise the registration statement and resubmit it to the FSS. A company official noted, "We will respond as diligently as possible to the requests of the FSS."
Earlier, Hanwha Aerospace announced a paid-in capital increase plan worth 3.6 trillion won. The reason was stated to be investments in overseas defense (1.6 trillion won), domestic defense (900 billion won), overseas shipbuilding (800 billion won), and engines for unmanned aerial vehicles (300 billion won). It was not only the largest scale ever across all listed companies but also had previously used cash for an acquisition of Hanwha Ocean equity, resulting in a chilly response from shareholders. On the day of the announcement of the capital increase plan, the stock price dropped by up to 15%.
The reaction from the securities industry was also negative. Lee Ji-ho, a researcher from MERITZ Securities, commented, "Hanwha Aerospace's annual investment target amount does not exceed 2 trillion won in a year, so it could have been feasible (to raise funds) with just the company's profit strength." Lee Dong-heon, a researcher from Shinhan Investment Corp., stated, "Last month's equity acquisition of Hanwha Ocean and the uncertainty regarding the parent company Hanwha's participation in the capital increase is disappointing."
Hanwha Aerospace maintains the position that a capital increase was unavoidable. This is because deciding to incur debt would increase the liability ratio, which would be unfavorable for winning overseas contracts. Han Sang-yoon, an IR officer at Hanwha Aerospace, explained at the previous day's shareholders' meeting, "Companies in the Anglo-American and European regions have longer periods of capital accumulation and therefore lower liability ratios," adding, "Our company has a relatively higher liability ratio while growing in a short period."
The FSS stated, "If the company submits a corrected registration statement in the future, we will thoroughly examine whether the correction requirements have been sufficiently reflected."