Hanwha Ocean to raise $1.49B via new shares issuance

[HANWHA OCEAN]

Hanwha Ocean's board of directors approved a 2 trillion won ($1.49 billion) capital increase on Wednesday via an issuance of new shares to bolster its maritime defense business in the overseas market.

The Korean shipbuilder is setting a 30 trillion won revenue target, along with a 5 trillion won operating profit by 2040.

According to a regulatory filing on Wednesday, the upcoming capital expansion will involve issuing 89,485,500 new common shares through a general public offering, following the allocation to existing shareholders. These new shares will be offered at a price of 22,350 won per share. The allocation date for the new shares is set for Sept. 25, and existing shareholders can subscribe for two days starting from Nov. 8. The general public offering subscription window will be open from Nov. 13 to 14.

From the raised funds, Hanwha Ocean intends to invest 900 billion won in securing overseas production bases and advanced technologies to develop the infrastructure to enter into the global maritime defense market that is currently focused on the United States and Europe.

Six hundred billion won will be allocated to developing an eco-friendly propulsion system using ammonia, methanol, and hydrogen, along with the creation of carriers for these substances, to address the rising demand for environmentally friendly products and technologies. The company aims to achieve a Level 4 full autonomous operation in smart ship technology by 2030.

An additional 200 billion won will be directed toward the global offshore wind power market, which is experiencing an annual growth rate of 18 percent. Capitalizing on the Hanwha Group's energy development capabilities, Hanwha Ocean aims to offer comprehensive services in the offshore wind power sector, including project development, manufacturing, transportation, installation, and maintenance.

Within its core shipbuilding domain, 300 billion won will be invested to establish a smart yard equipped with robotics and automation to enhance safety measures and address the labor shortage resulting from an aging workforce.

"Through this substantial investment, we aim to not only maximize the inherent competitiveness of shipbuilding but also become a global innovative company that provides solutions to the world's security and climate change," Hanwha Ocean CEO Kwon Hyek-woong said.

The decision comes only a few months after Hanwha Group took over debt-ridden Daewoo Shipbuilding & Marine Engineering in May. Five Hanwha affiliates, including Hanwha Aerospace and Hanwha Systems, participated in a 2 trillion won rights offering and became the controlling shareholder with a 49.3 percent stake in the shipbuilder.

Responding to news about the planned capital increase, Hanwha Ocean's stock price declined by more than 5 percent on Tuesday compared to the previous trading day. Subsequently, on Wednesday, the stock closed at 35,200 won, a decrease of 1.81 percent.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]