Hankook & Company Group's automobile thermal energy management corporations Hanon Systems will proceed with a large paid-in capital increase to improve its financial structure. It plans to raise more than 980 billion won to ease its borrowing fund burden and lay the groundwork for mid- to long-term growth.
Hanon Systems disclosed on the 18th that the final issue price for the paid-in capital increase by way of a rights offering with a public offering of forfeited shares, decided by a board resolution on Sept. 23, was set at 2,830 won per share. Through this, Hanon Systems plans to raise a total of 983.4 billion won, and, with financial structure improvement as the top priority, will use 883.4 billion won of the proceeds to repay borrowing fund.
When the repayment of borrowing fund is completed, Hanon Systems' liability ratio, which was about 245.7% on a consolidation basis at the end of the third quarter this year, will improve to about 164.0%. The remaining funds will be used for operating funds for payment of accounts payable (51.2 billion won) and for facility funds (48.8 billion won) for expansion and maintenance of production facilities.
The number of new shares to be issued through the paid-in capital increase is 347.5 million. Hanon Systems will first allocate about 0.4 new share per 1 existing share to existing shareholders (as of the 14th of last month) and will take subscriptions for existing shareholders from the 19th to the 22nd.
Hankook Tire & Technology (Hankook Tire; equity stake 54.77%), Hanon Systems' largest shareholder, decided through a board resolution in September to participate in the subscription for 152,293,930 shares, or 100% of the shares allocated to existing shareholders (43.8% of the new shares to be issued). Hanon Systems said this indicates responsible management for the paid-in capital increase and a commitment to its mid- to long-term growth strategy.
If forfeited shares occur after the rights offering, public subscriptions will be held over two days on the 24th and 26th, with the payment date set for the 30th. The scheduled listing date for the new shares is Jan. 12 next year.
Vice Chairman and CEO Lee Su-il of Hanon Systems said, "This paid-in capital increase is an important turning point to push ahead with a mid- to long-term growth strategy based on securing financial stability," adding, "We plan to improve profitability by gradually strengthening technological competitiveness and advancing our business portfolio."