Hanwha Corporation is moving to secure cash liquidity through real estate sales, a step seen as preparing funds ahead of its participation in a Hanwha Solutions rights offering.
According to the Financial Supervisory Service's electronic disclosure system Monday, Hanwha held a board meeting on the 19th and decided to sell its stake in the Pangyo Future Technology Research Institute to affiliate Hanwha Systems. The sale price is 287.85 billion won. Hanwha described the purpose of the transaction as "asset efficiency improvement and securing financial soundness, among others."
Located in Sampyeong-dong, Bundang-gu, Seongnam, Gyeonggi Province, the Pangyo Future Technology Research Institute is a research and development (R&D) hub of Hanwha Group completed in 2016. Major affiliates including Hanwha Corporation, Hanwha Aerospace, and Hanwha Vision hold divided stakes in it. The institute conducts R&D in core guided-weapon technologies such as laser and electro-optical sensors and image signal processing, as well as in solar cell manufacturing equipment and process automation facilities.
The industry is focusing on the timing of the transaction. Hanwha Solutions is pursuing a large-scale rights offering to improve its financial structure and secure funds for future growth investment. Based on the first issue price, the total size of the rights offering reaches 1.5 trillion won. Hanwha, the largest shareholder of Hanwha Solutions, has decided on an excess subscription of up to 120%, requiring it to invest about 520 billion won.
In response, Hanwha is sequentially disposing of non-operating assets to load up on funds. In fact, beyond its stake in the Pangyo Future Technology Research Institute, Hanwha is reportedly also pursuing the sale of its stake in the four-star hotel Courtyard Marriott Suwon. However, Hanwha said, "Nothing has been finalized yet."
