Seoul: South Korea's financial regulator on Thursday requested Hanwha Aerospace Co. to revise its plan to raise 3.6 trillion won (US$2.5 billion) through a stock sale, citing insufficient information for investors. The Financial Supervisory Service (FSS) found the filing by the defense equipment manufacturer lacking in several key areas, including the rationale for the rights offering, communication with shareholders, and the intended use of the proceeds.
According to Yonhap News Agency, the FSS plans to thoroughly assess the revised registration once it is submitted to ensure the requested changes are fully reflected. In a regulatory filing a week ago, Hanwha Aerospace indicated that the stock sale was part of its broader global investment plans in future growth sectors. However, the announcement led to a sharp decline in the company's share price due to concerns over the potential dilution of existing shareholders' stakes.
Market observers have acknowledged that Hanwha Aerospace's investment direction appears promising but have criticized the decision to increase capital given the company's already strong financial position. Hanwha Aerospace has stated its intention to fully cooperate with the authorities' request, viewing it as a procedural step in their capital increase efforts.