Hanwha Solutions has confirmed that its capital increase will be approximately 1.2 trillion won, half of the initially planned 2.4 trillion won. The performance of its U.S. solar business has become increasingly critical to offset the funding shortfall.
According to industry sources on July 21, Hanwha Solutions aims to raise a total of 1.1713 trillion won through this capital increase, significantly lower than the original target of 2.3976 trillion won. Financial authorities and investors have raised concerns about the plan to allocate most of the raised funds for debt repayment, leading to the reduced scale.
Previously, Hanwha Solutions announced that it would allocate 1.5 trillion won of the raised funds for debt repayment and the remaining 900 billion won for future growth investments.
Despite the decrease in raised funds, Hanwha Solutions maintains that it will proceed with its investment plans for U.S. production facilities as scheduled. The company plans to secure the necessary funds through local liquidity in the U.S. However, the amount allocated for debt repayment has been cut from 571 billion won to 263.6 billion won, a reduction of more than half, to support its U.S. solar investment plans.
Hanwha Solutions is also implementing stringent self-help measures. On July 16, the company sold a venture capital fund it had invested in to discover innovative U.S. companies for $84.3 million (approximately 125.5 billion won).
Additionally, the company issued 300 billion won worth of redeemable convertible preferred shares (RCPS) through its engineering, procurement, and construction (EPC) subsidiary in the U.S. It has also secured approximately 340 billion won in advanced manufacturing production tax credits (AMPC) for last year and this year.
However, these measures are still insufficient to fill the funding gap. Ultimately, the recovery of profitability in the U.S. solar business will be a key variable.
Hanwha Solutions expects that the profitability of Hanwha Q CELLS will improve starting in the third quarter, driven by the expansion of U.S. cell premiums and the normalization of Solar Hub operations. Currently, the annual demand for solar modules in the U.S. is about 40 gigawatts, but local cell production capacity is expected to be around 30 gigawatts next year, indicating a likely supply shortage of U.S.-made cells.
If the production yield and operational rate of Solar Hub stabilize, the effects of rising cell sales prices and AMPC benefits could be fully reflected in the company's performance.
A Hanwha Solutions official stated, "Following the sale of the venture fund, we are continuously identifying liquid assets. Since asset sales cannot be completed in the short term, we are reviewing various self-help measures to ensure that our investment plans for the second half of the year proceed without disruption."
* This article has been translated by AI.
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