Hanwha Aerospace disclosed the second amended securities registration statement regarding a 2.3 trillion won shareholder allocation capital increase. The amended registration statement released this time totals 1,243 pages, increasing by approximately 400 pages compared to the previously submitted statement.

An Byeong-cheol, the CEO of Hanwha Aerospace, is announcing the mid- to long-term investment plans and the recent stance on the capital increase at the Hanwha Aerospace Future Vision Presentation held at the Hanwha Group headquarters in Jung-gu, Seoul, on Nov. 8./Courtesy of News1

Hanwha Aerospace amended the securities registration statement detailing the capital increase plan and the intended use of funds through the Financial Supervisory Service (FSS) electronic disclosure system on the 30th.

Hanwha Aerospace noted, "To resolve misunderstandings in the market regarding the capital increase, we submitted an amended registration statement of 1,243 pages in accordance with the FSS's request for corrections."

Hanwha Aerospace submitted a 850-page registration statement on the 20th of last month, stating it would secure a production base to meet the surging demand in defense. However, the FSS requested corrections, citing insufficient explanations regarding the purpose of the capital increase, and after concerns regarding shareholder value dilution arose in the market, an initial amended registration statement was submitted, reducing the capital increase scale by 1.3 trillion won. Nevertheless, the FSS again requested further corrections, stating that the explanation regarding the reason for reducing the capital increase size was lacking.

Through the second amended registration statement, Hanwha Aerospace stated, "The issuance amount of the capital increase was changed from 3.6 trillion won to 2.3 trillion won," adding that "the shortfall of 1.3 trillion won was covered by the participation of Hanwha Energy, a subsidiary of Hanwha Ocean, in our third-party capital increase without any discount, amounting to 1.3 trillion won in equity sales proceeds."

It also added, "Third-party capital increases are expected to have positive factors on stock prices as they are conducted without discounts to protect shareholder rights," but noted that "the third-party allocation capital increase itself may act as a temporary factor for a decline in stock prices due to the increase in the number of shares."

Regarding possible sanctions arising from the reduction in the capital increase size, it stated, "The Korea Exchange has indicated the designation of an unfaithful disclosure corporation due to a change in the number of issued shares and the issuance amount of more than 20%," adding that "we officially submitted an explanation letter to the Korea Exchange regarding this matter and will diligently respond to the requested materials from the Korea Exchange until the designation of an unfaithful disclosure corporation is confirmed."

Hanwha Aerospace's capital increase efforts have significantly delayed the schedule. The effective date of the second amended registration statement is May 20. The FSS has selected Hanwha Aerospace's capital increase for key review and is currently examining it. For registration statements designated for key review, corrections can be requested within seven business days.

Hanwha Aerospace previously announced its intention to conduct a capital increase worth 3.6 trillion won to secure a production base to meet the surging demand in defense on the 20th of last month. At the time, the capital increase registration statement was drafted at 850 pages, detailing the intended use of funds, but the FSS requested corrections twice, citing insufficient explanations regarding the purpose of the capital increase.