Hanwha Aerospace is seeing its stock price rise as it decided to reduce the amount of its capital increase and proceed with a third-party allocation capital increase targeting Hanwha Energy.
Hanwha Aerospace shares were trading at 681,000 won at 8:34 a.m. during the pre-market (8 a.m. to 8:50 a.m.). The stock price rose 6.07% (39,000 won) from the previous day. With the defense industry performing well in European and U.S. stock markets overnight, changes in Hanwha Aerospace's capital increase plan are also believed to have contributed to the stock price rise.
Hanwha Aerospace issued a corrected announcement regarding its capital increase. It is reducing the scale of the shareholder allocation capital increase from 3.6 trillion won to 2.3 trillion won; however, the plan involves three companies—Hanwha Energy, Hanwha Impact Partners, and Hanwha Energy Singapore—filling the decreased 1.3 trillion won through a third-party allocation capital increase.
Hanwha Energy is 100% owned by Chairman Kim Seung-yeon's three sons: Vice Chairman Kim Dong-gwan, President Kim Dong-won, and Vice President Kim Dong-sun. Hanwha Energy decided not to discount the new share price during the third-party allocation capital increase, intending to purchase at market price this month. This differs from retail shareholders participating in the shareholder allocation capital increase who buy new shares at a 15% discounted price.
Son Jae-il, CEO of Hanwha Aerospace, explained, "It is a plan to alleviate the burden on retail shareholders participating in the shareholder allocation capital increase while reducing the dilution of existing shareholders' equity value and being able to secure the necessary funds of 3.6 trillion won."
This appears to be a move mindful of minority shareholders' opposition. Earlier, Hanwha Aerospace purchased a 1.3 trillion won stake in Hanwha Ocean from Hanwha Energy and Hanwha Impact Partners using the company's cash. After Hanwha Aerospace announced its capital increase plan, there was criticism that it was supporting the chairman's family while reaching out to shareholders.