Hanwha Solutions (009830.KS) has seen its planned rights offering shrink to 1.2 trillion won ($869 million) from an originally targeted 2.4 trillion won, forcing the company to speed up self-rescue efforts such as selling non-operating assets including its stake in Hanwha Impact. With the funds earmarked for debt repayment falling to less than 20% of the original plan, the company’s financial target — cutting net borrowings by more than 3 trillion won this year to bring them down to the 9 trillion won range — has been thrown into doubt.
Hanwha Solutions listed 53 million new shares on the 11th, according to the Korea Exchange. The move completed the rights offering 138 days after the company first approved it at a board meeting on March 26 this year. The chief financial officer, who had drawn controversy during the process, was replaced midway, leaving the company with considerable damage both internally and externally.
The rights offering, initially designed to issue up to 72 million new shares and raise 2.3976 trillion won, was cut by 51% to 1.1713 trillion won after regulatory rejections forced corrections, the company revised its own plan, and a decline in the share price lowered the issue price. Of the proceeds, only 263.6 billion won can actually be used to repay debt. The rest will all go toward future businesses, such as upgrading a tandem cell pilot line and building mass-production facilities.
Hanwha Solutions’ financial structure deteriorated rapidly as its two core businesses — solar power and chemicals — both slumped over the past two years. Cumulative operating losses for 2024 and 2025 reached 665 billion won. Unable to earn money from its core operations, the company had no choice but to rely on borrowing. That is closely tied to the surge in net borrowings — total debt minus cash and cash equivalents — from 7.2659 trillion won at the end of 2023 to 12.6914 trillion won at the end of last year. The debt-to-equity ratio likewise jumped from 81% at the end of 2023 to 196% at the end of last year. That is why the company, in pushing ahead with the rights offering, pledged to lower net borrowings to the 9 trillion won range and the debt-to-equity ratio to below 150% within the year.
Although the rights offering amounted to only a partial success, the view that earnings have bottomed out is gaining weight. After posting an operating loss of 489.8 billion won in the fourth quarter of last year, Hanwha Solutions swung to an operating profit of 92.6 billion won in the first quarter of this year, followed by 306.5 billion won in the second quarter. Shifts in the external environment surrounding the solar business are also an opportunity for the company. With the U.S. government tightening import restrictions targeting low-cost Chinese polysilicon and related derivative products, expectations are growing that Hanwha Solutions — which has built an integrated production base in the United States — will benefit.
The problem is that Hanwha Solutions faces about 1.6 trillion won in debt maturing this year and about 1.8 trillion won next year, totaling 3.4 trillion won over the two years. That is why the company is trying to accelerate self-rescue efforts, including the sale of non-core assets to raise quick funds. Last month, Hanwha Solutions sold a venture capital fund it had invested in to find innovative U.S. companies for $84.3 million (about 125.5 billion won), partly filling the debt-repayment funds left short by the reduced rights offering. It also monetized Advanced Manufacturing Production Credits (AMPC) received under the U.S. Inflation Reduction Act (IRA), cashing in early a combined 340 billion won of 2025 and 2026 AMPC.
In addition, the company put up for sale shares in affiliates that carry no risk to management control. Hanwha Solutions has decided to sell part of its 47.9% stake in Hanwha Impact (formerly Hanwha General Chemical), with a book value of 3.5948 trillion won, and is reported to have completed the selection of an advisory firm and distributed letters of intent to potential buyers. For its 49.7% stake in Hanwha Hotels & Resorts (560 billion won), the company is reviewing ways to monetize the asset using structured products such as a total return swap (TRS). Through these stake sales and monetizations, it plans to secure an additional 300 billion won within the third quarter. Hanwha Essential, a company specializing in precision electronic materials and components, is also open to a possible sale from next year onward.