Hanwha Solutions to raise $1.5 bn amid mounting losses
Ik-Hwan Kim
5 HOURS AGO
Hanwha Solutions’ booth at an industrial fair in Germany in April 2024 (File photo by Hanwha Solutions) Hanwha Solutions Corp., the flagship unit of South Korea’s chemicals-to-defense conglomerate Hanwha Group, is poised to raise as much as $1.5 billion through bonds and a loan at home and abroad as mounting losses hurt its financial structure.
Hanwha Solution decided to sell up to 800 billion won ($577.2 million) in its first perpetual bonds with a 30-year maturity next month, according to its regulatory filing on Thursday.
The bonds have an option for Hanwha Solution to call back after three years of their issuance and a cause to raise interest rates by 1.3 percentage points per annum if the company does not exercise the option, investment banking industry sources said on Friday.
Hanwha Solutions is in talks with major local securities firms on the management of the issuance and purchases of the bonds with an expected coupon rate of 5-6% per annum, the sources said.
GREEN BONDS, SYNDICATED LOAN
The company has various business divisions such as solar power solution provider Hanwha Q Cells Co. known as Qcells in overseas markets.
Q Energy Solutions SE, Hanwha Solutions’ German subsidiary, plans to sell 200 million Swiss Franc ($227 million) in green bonds, debt securities designed to finance eco-friendly projects, next month.
Hanwha Q Cells Georgia Inc., the South Korean company’s US subsidiary, on July 8 raised $700 million through a green syndicated loan from European lenders including Natixis, Santander Group and Société Générale S.A.
Hanwha Q Cells’ solar power plant in Texas (File photo by Hanwha Q Cells) MOUNTING LOSSES
Such fundraising came as Hanwha Solutions suffered from mounting losses.
The company reported a net loss of 777.7 billion won in the first half as its core renewable energy and chemicals businesses turned to the red.
Its renewable business logged an operating loss of 277.1 billion won during the January-June period on tumbling solar module prices, swinging from a profit of 355.7 billion won a year earlier, while its chemical business suffered a deficit of 36.1 billion won, compared with a surplus of 83.5 billion won.
The increasing losses affected Hanwha Solutions’ financial structure.
Its net debt, which shows how much cash would remain if all debts were paid off, ballooned to 10.4 trillion won as of end-June, up 43.1% from the end of 2023. Its debt ratio also jumped by 26 percentage points to 185% during the period.