Hanwha Systems has decided to liquidate its entire stake in Hanwha Ocean, securing approximately 1.4 trillion won. The company aims to enhance its investment capacity for future growth sectors, including satellites and defense artificial intelligence (AI).
According to a filing with the Financial Supervisory Service on October 16, Hanwha Systems held a board meeting and approved the transfer of 22,169,660 common shares of Hanwha Ocean. This represents 7.24% of Hanwha Ocean's total issued shares, and upon completion of the transaction, Hanwha Systems' stake in Hanwha Ocean will drop to 0%.
The disposal amount is set at 1.3834 trillion won, based on Hanwha Ocean's closing price of 62,400 won per share on October 15. The share transfer will occur on October 19 through an after-hours block trade, with the sale proceeds expected to be received in cash on October 21.
Four securities firms, including KB Securities, Kiwoom Securities, Korea Investment & Securities, and Shinhan Investment Corp., are participating in this transaction.
However, this is not a straightforward stake sale. Hanwha Systems will enter into a one-year price return swap (PRS) agreement with the buyers at the time of the share transfer. A PRS is a derivative financial transaction where the parties settle the difference between the settlement price at the time of the stock disposal and the initial sale price. As a result, Hanwha Systems may still be exposed to gains or losses from stock price fluctuations after the stake is sold.
Hanwha Systems plans to utilize the funds obtained from this transaction for investments in new businesses such as satellites and defense AI. The strategy aims to secure cash by liquidating existing assets while strengthening long-term growth drivers.
This marks the second time Hanwha Systems has liquidated its stake in Hanwha Ocean using the PRS method this year. In March, the company transferred approximately 4.33% of its shares to a special purpose company established by Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and Daishin Securities.
* This article has been translated by AI.
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