Hanwha Solutions Scales Back Rights Offering Amid Shareholder Concerns; Chairman Forgoes Salary

Hanwha Solutions has announced a significant revision to its capital raising plans, scaling back its proposed rights offering from 2.4 trillion won to 1.8 trillion won. This adjustment comes after considerable pushback from minority shareholders who voiced strong objections to the initial plan, which allocated a substantial portion of the funds to debt repayment. The revised proposal significantly reduces the debt servicing component, aiming to appease shareholder concerns.

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We have come up with a plan that reflects the various opinions of shareholders regarding the rights offering, protects shareholder value, and alleviates financial burden.

The initial plan, disclosed last month, intended to raise approximately 2.4 trillion won through the issuance of new shares, with over 60% earmarked for repaying company debt. This strategy drew sharp criticism from individual investors who demanded a greater focus on future investments and questioned the necessity of burdening shareholders with debt repayment. They also advocated for preferential share allocation to existing Hanwha affiliates rather than relying on new share issuance that could dilute existing share values.

In response to these concerns, and following a directive from the Financial Supervisory Service to provide clearer explanations regarding the use of funds, Hanwha Solutions has opted to maintain its investment in future growth technologies while substantially cutting back on debt repayment. The number of new shares to be issued has also been reduced, lessening the impact of dilution on existing shareholders. The company aims to secure the remaining 600 billion won through asset securitization.

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We sincerely regret and apologize for causing significant concern to shareholders and the market due to insufficient communication regarding the scale and background of the rights offering promotion in the early stages.

As a gesture of accountability and commitment to responsible management, Hanwha Group Chairman Kim Seung-youn has decided to forgo his salary from Hanwha Solutions starting in May. This move, detailed in the Hankyoreh report, is presented as a step towards demonstrating leadership in achieving the company's goals for technological investment and financial restructuring. The company's leadership has also issued apologies for the lack of sufficient communication with shareholders during the initial stages of the rights offering plan.

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As the top management, we will practice responsible management by actively contributing to future growth technology investment and financial structure improvement, which are the goals of the rights offering.