In its disclosure of 2025 annual report, the company classified a €215 million ($249 million) foreign-currency loan held by its European subsidiary, Q Energy Solutions SE, as a current liability despite its maturity dated February 2028.
The loan, issued in December 2021, was reclassified after Hanwha Solutions failed to meet a covenant requiring its net debt-to-EBITDA ratio to remain below five times.
As of end-2025, the company’s net debt stood at 12.2 trillion won ($8.1 billion), equivalent to 29.1 times EBITDA of 419.5 billion won.
The breach triggered an event of default (EOD), giving lenders the right to demand early repayment—effectively accelerating the liability profile and increasing financial risk.
The spike in the debt ratio has also raised scrutiny — 29.1 times last year and 25.4 times in 2024, compared with 5.9 times in 2023, 3.1 times in 2022, and 3.3 times in 2021.
Hanwha Solutions announced a 2.4 trillion won rights offering on March 26, issuing 72 million new shares. Of the proceeds, 1.5 trillion won, or 62.6 percent, will go toward debt repayment, with the remaining 900 billion won earmarked for strengthening its solar business.
The new funding is unlikely to materially improve leverage metrics. NICE Investors Service estimates that even if the entire proceeds were used to reduce debt, the net debt-to-EBITDA ratio would still hover at 23.4 times, as earnings remain subdued.
Shares of Hanwha Solutions plunged 18.2 percent on March 26 following the announcement and fell an additional 3.13 percent the next day.
Hanwha Solutions’ shares rose 0.67 percent to 37,400 won as of 1:37 p.m. Wednesday.
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