Hanwha Solutions has launched a self-rescue plan to secure liquidity in the United States to raise funds for improving its weakened financial structure after recently reducing the size of its rights offering.
Hanwha Solutions said on the 25th that it issued 300 billion won in redeemable convertible preferred shares (RCPS) through the Qcells institutional sector (Qcells) U.S. engineering, procurement and construction (EPC) business unit. The proceeds will be used to make up for the shortfall caused by the downsizing of Hanwha Solutions' rights offering and to improve its financial structure by strengthening capital.
Hanwha Solutions released a plan in March to conduct a 2.4 trillion won rights offering to repay debt. After the Financial Supervisory Service requested a revised filing, the company changed the plan three times and finalized the rights offering at 1.7 trillion won, 700 billion won less than originally planned.
The RCPS to be issued this time are shares granted a redemption right that allows investors to demand repayment at maturity and a conversion right that allows the preferred shares to be converted into common shares.
A Hanwha Solutions official said, "RCPS are one of the capital-raising methods used by many corporations and, depending on the conditions, can be classified as equity in accounting," adding, "We expect to bolster equity capital and improve our financial structure."
Qcells EPC, the issuer of the RCPS, directly handles EPC for solar power plants and energy storage system (ESS) projects in the United States. In 2024, it signed a module supply and EPC contract with Microsoft (MS). More recently, it has been seeking business partnerships with global big tech companies as demand for renewable energy surges with the expansion of artificial intelligence (AI) data centers.
Hanwha Solutions also expected business synergies from operating the entire value chain of its solar hub in the U.S. market, which favors locally made products. Under the Inflation Reduction Act (IRA) investment tax credit (ITC), power producers that meet certain requirements for using U.S.-made products can receive an additional tax credit equal to 10% of their investment.
Hanwha Solutions recently further securitized a total of $220.3 million (341.0 billion won) in U.S. advanced manufacturing production tax credits (AMPC): $120.3 million (186.1 billion won) for last year and $100 million (154.7 billion won) for this year. As a result, it accelerated monetization of the entire $373.7 million (578.4 billion won) AMPC received last year to secure liquidity.
Lee Jaebin, chief financial officer (CFO) of Hanwha Solutions, said, "We will swiftly complete the 700 billion won self-rescue plan, secure a foundation for sustainable growth, and focus on strengthening future competitiveness," adding, "We will work to ensure the market properly assesses our corporate value and do our best to enhance shareholder value."