Hanwha Solutions has secured approximately 125.5 billion won by selling a U.S. venture investment fund. This move aims to supplement funds needed for debt repayment following a reduction in the scale of a capital increase.
On July 16, Hanwha Solutions announced the sale of the venture fund, which invests in innovative U.S. companies, for $84.3 million, equivalent to about 125.5 billion won.
The proceeds from the sale will be used to replenish funds reduced by the smaller capital increase and to improve the company's financial structure. Previously, Hanwha Solutions raised 300 billion won by issuing redeemable convertible preferred shares (RCPS).
Since 2022, Hanwha Solutions has invested in this fund through its subsidiaries to monitor technological trends in energy transition, circular economy, and carbon utilization in the U.S., while seeking collaboration opportunities with related companies.
Initially, the company excluded the fund from the sale due to its long-term investment nature. However, the need for additional funding arose with the reduction in the capital increase, prompting the decision to sell. The company stated that the impact of the fund's disposal on medium- to long-term business profitability would be limited.
Hanwha Solutions also plans to pursue the liquidation of investment assets worth 300 billion won, as indicated during the capital increase correction process.
Credit rating agencies have maintained Hanwha Solutions' credit rating and outlook at their current levels. Korea Ratings assigned an 'AA-(Negative)' rating, while NICE Investors Service also rated it 'AA-(Negative)'.
The agencies reflected the potential for recovery in the renewable energy sector alongside the financial structure improvement measures, including the capital increase and asset sales.
Korea Ratings highlighted factors contributing to performance recovery, such as improvements in production systems due to the operation of the solar plant in Cartersville, Georgia, and the market position of the residential energy business, as well as the expansion of long-term contracts in engineering, procurement, and construction (EPC).
Lee Jae-bin, Chief Financial Officer of Hanwha Solutions, stated, "Once the capital increase is completed, we plan to proceed with our investment and financial structure improvement plans. We will leverage the vertical integration of our U.S. solar business to enhance performance in the renewable energy sector."
Meanwhile, last month, Hanwha Solutions issued 300 billion won in redeemable convertible preferred shares (RCPS) through its U.S. EPC subsidiary to secure funds for the capital increase.
* This article has been translated by AI.
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