Hanwha Solutions, which is pushing a 2.3 trillion won rights offering, said it will not conduct any additional rights offerings through 2030. The plan is to improve its financial structure based on cash generated from operations and expand shareholder return policies.
Hanwha Solutions on the 3rd held an investor relations session for retail investors at the headquarters of Korea Investment & Securities Co. in Yeouido, Seoul, and, highlighting that it implemented large-scale self-help measures ahead of the rights offering, said, "At least through 2030, there are no plans for an additional rights offering."
Hanwha Solutions convened a board meeting on the 26th, two days after the regular shareholders meeting on the 24th of last month, and decided on a rights offering via a shareholder allotment followed by a public offering of forfeited shares. As the newly appointed outside director at the shareholders meeting approved the rights offering, criticism followed that the outside director had little time to review the offering.
On this, the company said, "There was sufficient review and discussion at the board," and explained, "A rights offering via a third-party allotment is difficult to pursue due to reasons related to directors' fiduciary duties at listed affiliates and the equity structure, including cross-shareholding."
Hanwha Solutions reiterated, contrary to some shareholders' concerns, that there are no plans for an additional rights offering. Jung Won-young, Hanwha Solutions chief financial officer (CFO), said, "At least through 2030, without an additional rights offering, we plan to gradually repay borrowing fund based on cash generated from operations to strengthen financial soundness and to expand shareholder return policies in line with business growth."
Hanwha Solutions stressed that it has pursued all self-help measures over the past two years ahead of the rights offering. It raised about 1.6 trillion won by selling 1.057 trillion won worth of affiliate company equity, equity in Hanwha Savings Bank (178.5 billion won), the Ulsan company housing site (160.2 billion won), renewable energy development asset (160 billion won), idle land in the Yeosu industrial complex (36 billion won), and the electric vehicle charging business (25 billion won). It also raised 700 billion won by issuing hybrid securities (perpetual bonds) in the capital markets.
Regarding a third-party allotment rights offering demanded by some shareholders, the company said it is difficult to attract external investors in a timely manner, given the current financial structure and business portfolio. It added that if another affiliate with no business relevance to Hanwha Solutions participates in the rights offering, there could be issues under the Fair Trade Act such as potential unfair support, possible breaches of directors' fiduciary duties, and problems related to the equity structure, including cross-shareholding.
That day, Hanwha Solutions said it moved to build the only solar value chain in the United States on the back of large profits in 2022–2023. However, starting in 2024, its financial structure rapidly deteriorated due to unexpected variables such as a global slowdown in solar and petrochemicals, putting it at risk of a credit rating downgrade.
The company said, "In the first quarter of this year, we expect to swing to a profit, centered on the solar module sales business," and added, "If the Cartersville cell plant begins mass production in the third quarter, the U.S. government's advanced manufacturing tax credit will apply across the value chain from the second half, making a performance turnaround possible."