Hanwha Solutions: $2.4B Capital Increase for Solar Investment & Financial Strength

Hanwha Solutions Pursues $1.6 Billion Rights Offering to Bolster Finances and Invest in Next-Gen Solar Tech

Hanwha Solutions (009830.KS) is undertaking a 2.4 trillion won (approximately $1.6 billion) rights offering to strengthen its financial position and accelerate investment in advanced solar technologies, including perovskite tandem solar cells. The move comes as the company faces increasing pressure on its credit rating due to a slowdown in the global solar and chemical industries.

Financial Restructuring and Debt Reduction

The company plans to allocate approximately 1.5 trillion won of the proceeds to improve its financial structure by repaying existing debt. This includes corporate bonds, commercial paper and maturing loans. The goal is to reduce its consolidated debt-to-equity ratio to below 150% by 2026 and further to 100% by 2030, with net borrowings targeted at around 7 trillion won by 2030 .

Over the past two years, Hanwha Solutions has already taken significant steps to improve its financial health, divesting assets worth 1.6 trillion won. These assets included idle land in the Yeosu Industrial Complex, housing sites in Ulsan, renewable energy development assets, and stakes in affiliated companies . The company raised 700 billion won through the issuance of hybrid bonds .

Investment in Future Technologies

The remaining 900 billion won from the rights offering will be dedicated to investments in next-generation solar technologies over the next three years. Specifically, 100 billion won will be invested in a pilot line for perovskite tandem solar cells, considered a potentially transformative technology in the solar energy sector. An additional 800 billion won will be allocated to expand production capacity for TOPCon (Tunnel Oxide Passivated Contact) cells, which can be used as the lower cell in a tandem structure .

Rights Offering Details

The rights offering will be conducted through a shareholder allocation, followed by a public offering of any unsubscribed shares. The record date for new share allocation is May 14, and the offering price will be finalized on June 17. Existing shareholders will have the opportunity to subscribe from June 22 to June 23, even as the public offering of unsubscribed shares will run from June 25 to June 26 .

Shareholder Returns

Hanwha Solutions has as well announced a new shareholder return policy, committing to allocate 10% of its annual net profit to returns for shareholders over the next five years. This will be achieved through dividends, share repurchases, or treasury stock cancellations. The company guarantees a minimum annual dividend of 300 won per share .

The company’s stock dropped 18% following the announcement of the rights offering .