Exterior view of the Hanwha Building. Photo: Hanwha Group
Hanwha Solutions (009830.KS) has secured an additional approximately 125.5 billion won by selling a US venture investment fund, following its earlier raising of 300 billion won through the issuance of redeemable convertible preferred shares (RCPS).
Hanwha Solutions said on the 16th that it recently sold a venture investment fund, in which it had invested to discover innovative US companies, for $84.3 million (about 125.5 billion won). The company plans to use the proceeds from the fund sale to supplement the debt repayment resources needed following the reduction in the scale of its rights offering and to accelerate improvements in its financial structure.
Since 2022, Hanwha Solutions had invested in the fund through a subsidiary to identify future technology trends in the United States, such as energy transition, the circular economy, and carbon utilization, and to preemptively secure business cooperation opportunities. Considering the fund’s characteristic of discovering innovative companies and making long-term investments, the company had not previously considered it a candidate for sale.
However, Hanwha Solutions explained that after further reviewing self-help measures to ease the burden on shareholders by accepting various market opinions on the rights offering, it decided to sell the venture investment fund, which has a limited impact on medium- to long-term profitability and can be liquidated early.
Hanwha Solutions also plans to swiftly pursue the 300 billion won in investment asset liquidation presented during the process of amending the rights offering. By pursuing the rights offering and self-help measures in parallel, the company intends to proceed with future growth investment and financial soundness strengthening as scheduled, while focusing on enhancing medium- to long-term business competitiveness and improving shareholder value.
In June, Korea Ratings and NICE Investors Service maintained Hanwha Solutions’ credit rating (rating outlook) at ‘AA- (Negative)’ and ‘AA- (Negative),’ respectively, in their regular credit assessments, reflecting its efforts to improve its financial structure, including the current rights offering, along with prospects for earnings improvement centered on the renewable energy business.
Korea Ratings forecast an earnings recovery in the renewable energy segment over the short and medium term, citing vertical integration synergies from the completion of the Cartersville solar plant in the US amid rising power demand from data centers and other sources, a strong market position in the residential energy business, and efforts to expand long-term engineering, procurement and construction (EPC) contracts.
“Once the rights offering is completed, we plan to proceed with future growth investment and financial structure improvement plans without setbacks,” said Lee Jae-bin, chief financial officer (CFO) of Hanwha Solutions. “With the completion of the Cartersville plant, we have established a foundation for solar vertical integration in the US, and we expect stable earnings flows in the renewable energy segment to continue.”