Son Jae-il, representative of Hanwha Aerospace, said after the regular shareholders' meeting held on the 25th, "We will do our best to enhance shareholder value." He emphasized that the recently announced 3.6 trillion won capital increase plan was the best choice for Hanwha Aerospace to leap into a global defense industry corporation and mentioned that they would also focus on returning value to shareholders, such as increasing dividends.
Hanwha Aerospace held its regular shareholders' meeting at the Seongnam Chamber of Commerce in Gyeonggi Province that morning. Before the meeting began, one shareholder expressed discomfort to reporters, saying, "I don't understand why we did a capital increase without issuing corporate bonds." The stock price of Hanwha Aerospace dropped 13% the day after the announcement of the large-scale capital increase.
At the meeting, shareholders asked about market prospects and investment plans related to maritime defense. Son noted, "The naval ship market is opening rapidly, and we will seize growth opportunities through investment." He also stated, "In order to overcome 'European defense block' such as the European Union's local procurement of military supplies, large-scale investments locally are essential. For foreign bids, managing the liability ratio while executing in the short term makes capital increase the optimal solution."
Hanwha Aerospace's mention of the liability ratio is due to its bidding competitiveness. Han Sang-yoon, head of Hanwha Aerospace’s Investor Relations team, said after the shareholders' meeting, "One of the ratios that customers or partner companies consider important when winning orders overseas is the liability ratio," noting, "They want a company that can maintain and service weapons without issue for 30 years after one sale."
At the end of last year, Hanwha Aerospace's liability ratio was 280%, and it was anticipated that if borrowing increased without a capital increase, the liability ratio would rise by 100 percentage points over three years. The executive noted, "While companies in the English-speaking world or Europe have a long capital accumulation period, Hanwha Aerospace has high liability due to rapid growth. We believe that raising funds through borrowing can actually reduce business opportunities."
After Hanwha Aerospace announced a large-scale capital increase following the acquisition of a 1.3 trillion won stake in Hanwha Ocean from a company held 100% by the three sons of Hanwha Group Chairman Kim Seung-yeon, individual investors criticized that they are trying to use excess funds to strengthen the founder's control while solving new investment funds using general shareholders' money.
In response, the executive said, "Three years ago, when Hanwha Aerospace acquired the stake in Hanwha Ocean, both Hanwha Aerospace's stock price and Hanwha Ocean's rose. As the stake in Hanwha Ocean increases, the company benefiting is Hanwha Aerospace. I believe the market views it positively."