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Hanwha eyes U.S. plant, explosives market entry with 1 trillion-won investment

Published: 08 Apr. 2025, 18:41

PARK EUN-JEE
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Hanwha Aerospace President Ahn Byung-chul speaks during a media briefing on Tuesday in central Seoul. [YONHAP]

Hanwha Aerospace announced a detailed investment plan centered around the United States on Tuesday after filing a revised capital increase plan worth 3.6 trillion won ($2.4 billion).

The defense and aerospace unit, a parent firm of shipbuilder Hanwha Ocean that has a business connection with the U.S. Navy, will spend 1 trillion won out of the updated investment initiative building a manufacturing facility for raw explosives and propellants for ammunition, according to Ahn Byung-chul, the company’s president.

Another 800 billion won was allocated to make equity investment into overseas shipbuilders or shipyards by 2026. Hanwha Ocean and Hanwha Systems, two of Aerospace subsidiaries, acquired Philadelphia-based Philly Shipyard for $100 million, paving the way for the right to participate in bidding for U.S. warship projects.

A total of 600 billion won was earmarked for building joint ventures in Europe and Saudi Arabia.

Hanwha Aerospace held a Tuesday media briefing to address the controversy surrounding its large scale capital increase and express its future business strategies. Following the Financial Supervisory Service’s request that the company file a revised plan, the defense manufacturer decided to reduce the size of rights offering to 2.3 trillion won from the initial 3.6 trillion won.

For the remaining 1.3 trillion won, Hanwha Aerospace will issue new shares to three affiliates — Hanwha Energy, Hanwha Impact Partners and Hanwha Energy Corporation Singapore — in an effort to ease share dilution by existing shareholders.

The president also denied speculation that the initial plan was designed to facilitate a succession process at the expense of investors.

“The timing of the series of events could fuel the speculation, but the capital increase and an additional acquisition of stakes in Hanwha Ocean are something that we’ve long planned,” the president said.

He also apologized for lack of communication with investors about the controversial decision.

In explaining the intended use of the proceeds, Ahn highlighted a fresh business potential with the U.S., adding that it also aims to export a customized K9 self-propelled howitzer.

“We will finish the development of wheeled type self-propelled howitzer for the U.S. Army next year,” adding that the market expressed a favorable reaction to the K9.

BY PARK EUN-JEE [[email protected]]