Hanwha Solutions Settles on a 1.2 Trillion Won Rights Offering, Half Its Original Plan

Hanwha Solutions has confirmed a rights offering of 1.2 trillion won, about 810 million dollars, in a regulatory filing on Monday. The final figure is half the 2.4 trillion won the company floated when it announced the plan in March, and below the 1.7 trillion won it had already scaled back to.

Shares in the offering are priced at 22,100 won.

Why it shrank

Two pressures brought the number down. The Financial Supervisory Service asked the company to revisit the plan, and minority shareholders objected, as they often do to large rights issues that dilute existing holders. A rights offering of this size raised the prospect of a meaningful reduction in the value of shares already held.

The company's own share price then worked against it. As the stock declined, the same offering raised less money, which is the mechanical reason the proceeds landed where they did.

What the money was for

Under the original plan, 1.5 trillion won was earmarked for repaying debt and 900 billion won for growth investment. The company did not restate how the smaller sum will be split between those two purposes.

It said it plans to cover the shortfall through internal financing, including by drawing additional liquidity from its operations in the United States.

Hanwha Solutions is the flagship energy and chemicals arm of Hanwha Group, and the gap between what it set out to raise and what it will actually collect is the part worth watching, since the debt it intended to retire does not shrink to match.