Hanwha's preferred stock, Hanwha Preferred, is showing an upward trend in early trading on the 14th, the last day of regular trading before delisting. It appears investors who expect measures to be announced even after delisting are stepping in to "buy."
Hanwha Preferred shares traded at 42,100 won in the KOSPI market at 9 a.m. on the 14th. This is an increase of 1.08% (450 won) from the previous trading day. Hanwha Preferred shares fell from 71,100 won on the 30th of last month to 37,950 won on the 7th before recently rebounding slightly.
Previously, the Korea Exchange decided to delist Hanwha Preferred shares, noting that the number of listed shares as of the 30th of last month was below 200,000 shares (199,033 shares) for two consecutive halves.
Minor shareholders of Hanwha Preferred are demanding conversion to Hanwha common shares or a public purchase reflecting the per-share net worth of 110,000 to 120,000 won.
However, Hanwha has maintained the position that it is difficult to accept the requests of the minor shareholders since it has been disclosing its plans for delisting for a year and had conducted a public purchase at 40,500 won, which is 11% higher than the price before the announcement.
They argue that equity among shareholders must be considered. If Hanwha Preferred shares are converted into common shares or if a purchase is made based on net worth, it is highly likely that shareholders of Hanwha3 Preferred B will demand the same conditions. Hanwha Preferred and Hanwha3 Preferred B have the same conditions for cash dividends.
If Hanwha3 Preferred B is converted into common shares, the burden on existing Hanwha common shareholders also increases. Currently, the number of listed shares for Hanwha common shares is about 74.96 million, while Hanwha3 Preferred B has about 19.4 million shares. Converting Hanwha3 Preferred B into common shares would increase the total number of shares by about 25%, which could lead to a sharp drop in share prices.