The Financial Supervisory Service expressed a positive stance regarding Hanwha Aerospace's reduction of its paid-in capital increase size but stated on the 8th that it would look into whether the circumstances surrounding the change in capital increase structure were properly disclosed.
On that day, Hanwha Aerospace decided to reduce the size of its paid-in capital increase to 2.3 trillion won, down from 3.6 trillion won, which is the largest amount for a listed company in South Korea. This appears to be a measure to appease shareholders' dissatisfaction about using the capital increase for succession.
A FSS official noted, "The disclosure review will proceed as per procedures, regardless of the reduction in the size of the paid-in capital increase," adding that whether the background or circumstances of the changes in capital increase structure are well documented will be a key review point.
Internally, the FSS believes that Hanwha Aerospace's reduction of the paid-in capital increase size demonstrates efforts to resolve conflicts with shareholders. The reduced capital increase amount of 1.3 trillion won will be reinvested into Hanwha Aerospace through a third-party paid-in capital increase by Hanwha Energy, which is fully owned by the owner's three siblings.
From the siblings' perspective, it is putting back the cash equivalent to the amount gained from selling Hanwha Ocean's equity to Hanwha Aerospace. There is a sentiment that this shows shareholders that this paid-in capital increase is separate from the acquisition of Hanwha Ocean.
However, the FSS plans to continue the disclosure review separately. In particular, it's necessary to check if the changes in the capital increase structure due to the reduction in size were properly documented.
A FSS official explained, "In principle, reviews focus on whether the facts are accurately documented in the disclosure," and noted that it should also be examined whether the changes related to this reduction in size were well reflected.
Hanwha Aerospace announced a plan for a 3.6 trillion won paid-in capital increase just over a month after acquiring a 7.3% stake in Hanwha Ocean for 1.3 trillion won from Hanwha Impact and Hanwha Energy. Investors expressed opposition, stating that Hanwha Group is channeling cash to Hanwha Impact and Hanwha Energy for the third-generation succession while securing necessary funds for the business through the paid-in capital increase.
When Hanwha Aerospace first disclosed the paid-in capital increase, FSS Chairman Lee Bok-hyun said, "It has significance as the corporations have decided to invest," but after significant backlash from shareholders, he demanded corrections to the securities registration statement for the paid-in capital increase, citing insufficient documentation regarding the shareholder communication process.