Hanwha Solutions faces backlash over abrupt rights offering plan

Hanwha Solutions' exhibition booth for the WIRE 2024 cable exhibition in Germany in April 2024 / Courtesy of Hanwha Solutions

Hanwha Solutions has drawn mounting criticism from both shareholders and securities analysts after it abruptly announced on Thursday a plan to raise capital by issuing new shares worth 2.4 trillion won ($1.6 billion).

While minority shareholders have begun procedures to file petitions with the presidential office and the financial regulator to prevent the expected depreciation of their shares, analysts warned investors against buying the company’s stocks, expressing doubts about whether the proposed rights offering will achieve its intended goals.

Under the plan announced just two days after the general shareholders’ meeting, Hanwha Solutions will issue new common shares so that it can use 1.5 trillion won of the proceeds to repay debts. The remaining 900 billion won will go toward strengthening its solar power business, operated by its Qcells division.

Because the deal will add 72 million common shares to the 171.89 million outstanding ones, the company’s stock price fell 18.22 percent on the day of the announcement. It inched down another 3.13 percent to 35,650 won Friday.

Act, an online platform for retail investors, said it has begun collecting signatures for a petition urging the Financial Supervisory Service (FSS) to scrutinize the company's plan.

"We are also planning to file a petition with Cheong Wa Dae," the platform's operator said.

DS Investment & Securities analyst Ahn Joo-won advised investors to sell Hanwha Solutions’ shares — a rare move among domestic securities firms.

Citing the company’s net debt that reached 13 trillion won as of the end of 2025, the analyst said the planned debt repayment of 1.5 trillion won would not meaningfully improve its financial soundness.

“The investment of 900 billion won in the mass production of tandem cells and the construction of TOPCon production facilities does not seem reasonable,” Ahn said. “Investment in new technology should be done when the company makes stable profits.”

Samsung Securities and Mirae Asset Securities, which had previously advised investors to buy Hanwha Solutions’ shares, changed their positions to “neutral.”

Hanwha Investment & Securities, a subsidiary of Hanwha Group along with Hanwha Solutions, was among the few brokerages defending the rights offering plan. However, it also warned that delays in the company’s turnaround could limit the offering’s intended effect.

The FSS plans to designate Hanwha Solutions as a company subject to close review, given the scale of the rights offering.

Park Sang-hyun, an analyst at SmartKarma, a Singapore-based investment research firm, said there is a low probability that the regulator will act as a "deal-breaker," as Hanwha Corp., the largest shareholder of Hanwha Solutions, has indicated its intent to participate in the offering.

Senior executives of Hanwha Solutions, including Hanwha Group Vice Chairman Kim Dong-kwan, also plan to purchase the company's treasury stocks worth 4.2 billion won.

"It's not an easy case for the FSS to outright block or challenge the deal’s legitimacy," Park said. "In this setup, the most likely ask from the regulator would be stronger sponsor support."

Given President Lee Jae Myung’s push to stimulate the domestic stock market, Hanwha Solutions could still reduce the size of the offering, as Hanwha Aerospace did in March last year.

The aerospace and defense firm, which had sought the largest-ever rights offering in the domestic stock market, cut the deal’s size from 3.6 trillion won to 2.3 trillion won.

At that time, politicians including Lee, then a leading presidential candidate, criticized the plan as part of efforts to help the three sons of Hanwha Group Chairman Kim Seung-youn inherit control of the conglomerate.