Industry officials said Saturday that Hanwha Solutions disclosed it was asked by the Financial Supervisory Service on April 30 to submit a revised registration statement for the rights offering it filed April 17. It was the second such request, following an initial revision demand on April 9. The filing has not been accepted, and its effectiveness has been suspended.
Hanwha Solutions previously announced a 2.4 trillion won rights offering aimed at repaying debt, saying it was a step to prevent a credit-rating downgrade amid worsening business conditions. The market response was negative, with criticism that the company moved ahead with a large share issuance without sufficient communication with shareholders and that it planned to use most of the proceeds to pay down debt.
The company reapplied after cutting the offering to 1.8144 trillion won, but still failed to clear the regulator’s review. The FSS said the disclosure lacked sufficient detail. It reportedly took issue in particular with about 5 trillion won in noncore assets, including real estate and stakes in other companies, held by Hanwha Solutions.
During the first review, the FSS was also said to have questioned why the company pursued a rights offering despite holding a sizable amount of such noncore assets.
Some in the market say Hanwha Solutions needs to redesign the offering, providing more specific explanations of how the funds will be used and how the plan would improve its finances, while also presenting steps to limit damage to shareholder value.
Industry observers have raised the possibility that Hanwha Solutions could further reduce the amount and add a third-party allotment, since debt repayment still accounts for nearly half of the use of proceeds even after the cut. However, a third-party deal may be difficult because demand from outside investors may be limited and only a small number of affiliates could participate, they said.
Hanwha Solutions said it would accept the FSS request and work to supplement the filing. “We take the FSS request very seriously,” the company said, adding that it would “humbly reflect once again on the criticisms and opinions raised by shareholders and the media” and prepare a revised registration statement that meets the requirements.
* This article has been translated by AI.
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