Hanwha Aerospace (Hanwha Aero) has decided on a shareholder allocation capital increase worth 3.6 trillion won, but its largest shareholder, Hanwha Co., has not disclosed whether it will participate in the capital increase. To receive the amount of the capital increase equivalent to its equity ownership (33.95%), Hanwha Co. needs 977.8 billion won, but as of the end of last year, its cash and cash equivalents were only 186.7 billion won.
According to the Financial Supervisory Service on the 24th, Hanwha Aerospace plans to issue a total of 5,955,500 shares through this capital increase. The allocation for existing shareholders is 80% (4,760,400 shares), while the employee stock ownership association will receive 20% (1,191,100 shares). For Hanwha Co. to subscribe according to its equity ratio (33.95%), it must receive 1,616,156 shares. Based on the scheduled issuance price (605,000 won), this equates to 977.8 billion won.
Hanwha Co., functioning as the holding company of the Hanwha Group and owning equities in several subsidiaries, has limited cash on hand. Hanwha Co.'s largest shareholder is Chairman Kim Seung-yeon (22.65%), followed by Hanwha Energy (22.16%), Vice Chairman Kim Dong-kwan (4.91%), President Kim Dong-won of Hanwha Life (2.14%), and Vice President Kim Dong-sun of Hanwha Galleria (2.14%), among others. Hanwha Energy is a company owned 100% by the three brothers Kim Dong-kwan, Kim Dong-won, and Kim Dong-sun.
Even if Hanwha Co. does not participate in the Hanwha Aerospace capital increase, the governance structure will not face significant issues. After the issuance of new shares, Hanwha Co.'s equity ratio will decrease from the existing 33.95% to 30.03%, a drop of 3.92 percentage points. However, if the friendly force, the employee stock ownership association, fully participates, its equity will increase by 2.3 percentage points. The amount not subscribed by Hanwha Co., the employee stock ownership association, the National Pension Service (7.43%), and minority shareholders (54.10%) will be released into the market through a general public offering of unallocated shares.
A Hanwha official noted, "Participation in the capital increase must go through the Hanwha Co. board of directors, and no concrete plans have yet been determined."