Hanwha Solutions Implements 300 Billion Won Self-Rescue Plan to Secure Funding

Hanwha Solutions logo [Photo=Hanwha Solutions]

Hanwha Solutions is accelerating its financial restructuring by implementing a self-rescue plan to address funding shortfalls caused by a reduced capital increase. The company plans to secure liquidity through the issuance of redeemable convertible preferred shares (RCPS) via its U.S. subsidiary and additional monetization of the Advanced Manufacturing Tax Credit (AMPC).
On June 25, Hanwha Solutions announced that its U.S. EPC (Engineering, Procurement, and Construction) subsidiary has issued 300 billion won in RCPS. The proceeds from this issuance will be used to cover the funding shortfall resulting from the scaled-back capital increase and to improve the company's financial structure.
RCPS provides investors with the right to redeem their investment at maturity and the option to convert preferred shares into common stock. This financing method, utilized by various companies, can be classified as equity on the balance sheet depending on certain criteria, thus enhancing capital and improving financial structure.
The Qcell EPC subsidiary directly executes solar power and energy storage system projects in the U.S. It recently signed a module supply and EPC contract with Microsoft in 2024 and is exploring additional business collaborations with major global tech companies amid rising demand for renewable energy.
In the U.S. market, which favors locally produced products, the company anticipates synergies from operating the entire solar hub value chain. According to the Inflation Reduction Act (IRA) Investment Tax Credit (ITC), power producers that meet specific requirements for using U.S.-made products can receive an additional tax credit benefit equivalent to 10% of their investment.
Additionally, Hanwha Solutions has recently further monetized a total of $220.3 million (approximately 340 billion won) in AMPC, including $120.3 million (about 185.7 billion won) for 2025 and $100 million (about 154.3 billion won) for 2026. This allows the company to cash out the entire $373.7 million (approximately 576.8 billion won) received in AMPC for 2025, thereby securing liquidity.
Hanwha Solutions plans to continue its efforts to secure stable cash flow and improve its financial structure through ongoing AMPC monetization.
Previously, Hanwha Solutions reduced its planned capital increase from an initial 2.4 trillion won to 1.7 trillion won to protect shareholder value and alleviate financial burdens, reflecting various opinions from shareholders and the market.
To address the resulting funding shortfall of 700 billion won, the company will implement a robust self-rescue plan. Starting with the issuance of 300 billion won in RCPS, it plans to secure an additional 400 billion won through asset monetization and the sale of a U.S. venture capital fund to improve its financial structure.
Lee Jae-bin, Chief Financial Officer of Hanwha Solutions, stated, "We will swiftly complete the 700 billion won self-rescue plan and focus on securing a sustainable growth foundation and enhancing future competitiveness. We will strive to ensure that our corporate value is appropriately recognized in the market and do our utmost to enhance shareholder value."

* This article has been translated by AI.