Hanwha Aerospace closed its largest-ever rights offering worth nearly 3 trillion won ($2.19 billion) on July 11, marking the end of a turbulent four-month saga that exposed governance concerns at South Korea’s defense contractor.
The subscription rate from existing shareholders reached 106.43%, while the public offering drew a competition ratio of 227.6 to 1, according to company filings. New shares will begin trading July 21.
The offering’s completion caps a contentious process that began in March when Hanwha first announced a 3.6 trillion won capital raise. The Financial Supervisory Service twice rejected the proposal, questioning why the company needed emergency funding after spending 1.3 trillion won purchasing shares of affiliate Hanwha Ocean from entities controlled by the founding family.
Regulatory pressure forced Hanwha to reduce the offering to 2.3 trillion won in April before rising share prices inflated the final amount back toward 3 trillion won. The company’s stock has surged 18% since the March announcement, defying typical patterns where rights offerings depress share prices.
Critics maintain the fundraising primarily benefits controlling shareholders rather than operational needs. Hanwha posted 710 million in profit last year and analysts estimate the company could have funded its stated investment plans through retained earnings over the next two years.
The proceeds will fund overseas facility expansion and weapons production capacity.
