Hanwha's stock price surged by 300% compared to the beginning of the year due to the robust defense business and the effects of the amended Commercial Code, but Hanwha 1st preferred stock (hereinafter Hanwha Preferred) has recently shown a sluggish stock price trend, drawing attention.
Hanwha Preferred's stock price dropped 45% over the last two days. The reason for this poor performance is that Hanwha Preferred is undergoing delisting procedures, and the shareholders’ solidarity holding Hanwha Preferred stocks are expressing discontent, stating that they are undergoing delisting due to Hanwha's mistakes. They plan to continue protests, particularly noting that Hanwha failed to carry out the promised market purchases and have submitted a petition to the presidential office.
As of 12:30 p.m. on the 7th, Hanwha Preferred stocks are trading at 38,500 won, down 8.98% (3,800 won) from the previous trading day on the KOSPI market. This figure represents a decline of more than 45% compared to the closing price of 71,100 won on the 3rd. Previously, on the 4th, Hanwha Preferred stocks finished down 40.51% (28,800 won) at 42,300 won.
This is significantly influenced by the start of Hanwha Preferred's orderly transaction on the 4th. Since last year, Hanwha has entered the process to delist Hanwha Preferred stocks. The reasoning behind this is that Hanwha Preferred has received several warnings from the Korea Exchange about the concern of sharp price fluctuations due to low trading volume and the small number of circulating shares.
Hanwha has burned 252,191 shares of Hanwha Preferred that were acquired through a public offering from August to September last year. As a result of this burning, the number of Hanwha Preferred stocks is now 199,033 shares, which has fallen below the Korea Exchange’s delisting regulation of fewer than 200,000 shares, prompting the initiation of delisting procedures.
Shareholders holding Hanwha Preferred are looking bewildered. This is because there is a significant difference between Hanwha voluntarily delisting preferred stock they bought and being forcibly ejected for not meeting listing requirements.
They expected that once the orderly transaction period began, Hanwha would carry out the promised market purchase, but they are claiming that no market purchase took place on the 4th.
Previously, in July of last year, according to the board meeting minutes of the 'Decision on Acquiring Treasury Stocks' disclosed by Hanwha, it was stated that 'even if delisting proceeds, measures to protect minority shareholders will be established during the orderly transaction period granted at the time of delisting approval, such as market purchases and off-market purchases after delisting,' and 'it is believed that minority shareholders will not lose liquidity by holding unlisted stocks.' At that time, Hanwha resolved to purchase 451,106 shares of Hanwha Preferred at 40,500 won per share.
Choi Hyun-jin, the representative of the Hanwha Preferred shareholders’ solidarity, said, 'To carry out a market purchase, a purchase price must be set and disclosed, but there has been no market purchase and no disclosures made,' adding, 'the number of shares is very small, and since delisting has already been announced, shareholders who want to sell now cannot do so.'
Hanwha stated that 'during the orderly transaction period, stock transactions are conducted at a single price, and there is a concern that a market purchase by the company could cause severe price distortion, so it was reviewed but could not be executed,' adding, 'various options such as off-market purchases are being carefully discussed.'
Meanwhile, the Hanwha Preferred minority shareholders’ solidarity is gathering on the shareholder action platform 'Act.' As of the 7th, 123 shareholders have accumulated 41.29% of Hanwha Preferred shares. They stated that they plan to submit a petition to the presidential office and urge the financial authorities to investigate the situation.