Kim Dong-seon, CEO of Hanwha Machinery and Service Holdings (Hanwha M&S), has announced an expansion of the company's stock buyback program from the initial 16.06 million shares to 26.203 million shares. This decision comes as Kim Dong-kwan, Vice Chairman of Hanwha Group, and Kim Dong-won, Vice Chairman of Hanwha Life, expressed their intention to participate in the buyback, raising concerns that this could limit selling opportunities for small shareholders.
On October 22, Hanwha M&S disclosed that Kim submitted a revised report to the Financial Supervisory Service to acquire an additional 10.143 million common shares.
As a result, the total buyback volume has increased from approximately 19% to about 31% of the existing shares. The buyback price remains at 8,000 won per share, and the buyback period is unchanged, running from October 12 to November 2. Consequently, Kim's personal investment is expected to rise to around 210 billion won.
This decision was influenced by the participation of related parties in the buyback. Kim Dong-kwan plans to subscribe to 6.762 million shares (8%), while Kim Dong-won intends to acquire 3.381 million shares (4%). Their combined shares account for 63.2% of the original buyback target, prompting concerns that this could significantly reduce allocation opportunities for small shareholders. In response, Kim decided to increase the buyback volume to protect shareholder interests.
A Hanwha M&S representative stated, "Concerns were raised that small shareholders wishing to participate in the buyback could have their rights infringed, prompting Kim to significantly increase the buyback volume. This decision aligns with the purpose of the buyback, which is to provide all shareholders with an equal opportunity to sell their shares under the same conditions."
Previously, on October 12, Kim announced the buyback of 16.06 million shares of Hanwha M&S. This move was intended to demonstrate a commitment to responsible management in light of shareholder concerns regarding stock price declines and the company's growth potential raised during the first shareholders' meeting held last month.
The proposed buyback price of 8,000 won represents a 27% premium over the average stock price of approximately 6,300 won over the month preceding the announcement. Compared to the closing price of 6,080 won on the last trading day before the announcement on October 8, this reflects a premium of about 32%.
Following the buyback announcement, Hanwha M&S's stock price also increased. On October 21, the closing price was 7,440 won, up 22.37% from the closing price of 6,080 won on October 8. Compared to the closing price of 5,710 won on September 30, the increase is 30.3%, marking the highest rise among KOSPI 200 constituents this month, while the KOSPI 200 index fell by 17.64% during the same period.
A Hanwha M&S representative remarked, "Kim's additional buyback not only broadly guarantees selling opportunities for common shareholders but also further strengthens the commitment to addressing shareholder voices and responsible management that initiated this buyback. We will continue to explore various measures to enhance shareholder and corporate value."
Hanwha M&S was established in August through the spin-off of Hanwha Group's Tech & Life division and was listed on the stock market the same month. The tech division includes Hanwha Vision, Hanwha Semitech, Hanwha Momentum, and Hanwha Robotics, while the life division comprises Hanwha Galleria, Hanwha Hotels & Resorts, and Our Home.
* This article has been translated by AI.
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