Hanwha Solutions restructures to focus on solar

Hanwha Solutions will streamline its business portfolio to boost its solar power business, the company said in an electronic disclosure Friday, a month after a landmark U.S. climate law was enacted.

Hanwha Solutions operates in five separate business sectors: renewable energy, petrochemicals, advanced materials, retail and city development. To put more focus on the renewable energy business, the company decided to spin off its retail unit and split off part of the advanced materials unit.

A spin-off distributes shares of a new company to shareholders of the existing company, while in a split-off, the parent company sells some shares of the subsidiary, allowing it to raise capital while maintaining control of the newly listed entity.

As a result of the shake-up, only three divisions will remain under Hanwha Solutions: the Q Cells solar energy unit, the chemicals unit, and the local solar energy business development unit specializing in domestic projects.

Stakes in the new advanced materials subsidiary will be put up for sales to raise capital, according to Hanwha Solutions. The company hopes to invest the money in expanding the production capacity of its U.S. solar module plant, which is expected to benefit from tax credits thanks to the U.S. Inflation Reduction Act (IRA).

Hanwha Solutions said it expects to get a $200-million tax cut a year for the next 10 years starting 2023, according to a Bloomberg report on Aug. 23.

The company is running a 1.7-gigawatt solar module factory in Georgia, and plans to pour 200 billion won ($141 million) next year into expanding production capacity by 1.4 gigawatts to a combined capacity of 3.1 gigawatts, which would be the biggest for a solar equipment supplier operating in the United States.

A 760-billion-won investment in domestic solar projects was announced on Sept. 7 as well.

If the split-off plan of the advanced materials unit is approved at a shareholder meeting in October, the new subsidiary will be inaugurated in December. The spin-off of the retail unit will be wrapped up by March next year.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]