Hanwha Solutions to raise $1.5 bn amid mounting losses

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 loans 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 them back three years after issuance and a cause to raise interest rates by 1.3 percentage point per year if the company does not exercise the option, banking industry sources said on Friday.

Hanwha Solutions is now in talks with major domestic securities firms on management of the issuance and purchase of the bonds with an expected coupon rate of 5-6% per annum, the sources said.

GREEN BONDS, SYNDICATED LOAN

Among the company's businesses is solar power solutions provider Hanwha Q Cells Co., better known overseas as Qcells.

Q Energy Solutions SE, Hanwha Solutions’ German subsidiary, next month plans to sell 200 million Swiss francs ($227 million) worth of green bonds — debt securities designed to finance eco-friendly projects.

Hanwha Q Cells Georgia Inc., the 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 Solutions is establishing a solar energy hub in the US state of Georgia with an investment of 3.2 trillion won.

MOUNTING LOSSES

The fundraising came as Hanwha Solutions suffered from mounting losses.

The company reported a net loss of 777.7 billion won in the first half of 2024 as its core renewable energy and chemicals businesses turned to the red.

Its renewables business logged an operating loss of 277.1 billion won in the first half on tumbling solar module prices, swinging from a profit of 355.7 billion won a year earlier. Meanwhile, its chemical business suffered a 36.1 billion won deficit compared with a surplus of 83.5 billion won a year earlier.

The accumulating losses have impacted Hanwha Solutions’ financial structure.

Its net debt, which reflects 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 jumped by 26 percentage points to 185% during the period.

Write to Ik-Hwan Kim at lovepen@hankyung.com
 
Jongwoo Cheon edited this article.