Seoul: Hanwha Aerospace Co., a South Korean defense industry company, announced on Tuesday that it has submitted a revised plan for its share sale, aiming to raise 2.3 trillion won (US$1.56 billion) after a request from the financial regulator.
According to Yonhap News Agency, the company initially sought to generate 3.6 trillion won through a stock sale. However, the Financial Supervisory Service (FSS) requested a revised plan, highlighting that the initial proposal contained insufficient information for investors. To bridge the shortfall of 1.3 trillion won, Hanwha Aerospace will issue new shares to three affiliates within the Hanwha Group: Hanwha Energy Corp., Hanwha Impact Partners Inc., and Hanwha Energy Corporation Singapore Pte., as confirmed in a regulatory filing.
The FSS's request for revision was based on several identified deficiencies in the original plan, including the rationale behind the rights offering, the method of communication with shareholders, and the intended use of the raised capital. Hanwha Aerospace has clarified that this rights issue is part of its larger strategy to invest globally in future growth sectors within the defense equipment industry.
The company plans to use the proceeds to acquire strategic production bases across Europe, the Middle East, Australia, and the United States. This move aligns with anticipated opportunities arising from Europe's rearmament initiatives and the United States' efforts to enhance its shipbuilding industry, as stated by the company.
Following the announcement on Tuesday, Hanwha Aerospace's shares surged by 8.72 percent to 698,000 won, reflecting eased concerns about the dilution of existing shareholders' stakes. This increase significantly outperformed the broader Korea Composite Stock Price Index's (KOSPI) modest gain of 0.26 percent.