Hanwha Building in Janggyo-dong, Seoul. (Photo: Hanwha Group)

 

 

[Alpha Biz= Kim Jisun] Hanwha has formally rejected demands from minority shareholders to convert its preferred shares (Hanwha1U, ticker: Hanwha 우) into common shares, citing concerns over potential dilution and fairness to existing common shareholders.



A Hanwha representative stated on July 9, “There are no provisions in our corporate charter allowing for such a conversion, and it could result in dilution that harms the interests of existing common shareholders. Furthermore, converting Hanwha1U would raise fairness issues with holders of Hanwha3U B shares, making it difficult to accept this demand.”



The Korea Exchange announced on June 30 that Hanwha1U would be delisted after its outstanding share count fell below the required 200,000 shares for two consecutive half-year periods, with only 199,033 shares remaining. The stock is currently undergoing liquidation trading through July 14 and is scheduled for final delisting on July 15.



In response, minority shareholders recently issued a statement urging Hanwha to either convert the preferred shares to common shares at a 1:1 ratio or buy them back at ₩112,000 per share, the company's book value per share (BPS). They criticized Hanwha for allegedly “intentionally reducing the share count,” noting that retaining just 967 more shares would have prevented delisting.



Hanwha responded that it had clearly disclosed its intention to delist Hanwha1U over a year ago. In July 2023, the company announced plans to repurchase and retire treasury shares, explicitly noting the purpose of delisting. Hanwha also emphasized that it conducted a tender offer at ₩40,500 per share—11% above the pre-announcement share price—and issued multiple public disclosures warning of the potential delisting.



Regarding the BPS-based buyback request, Hanwha noted, “The proposed price is 37% higher than the closing price of ₩71,100 as of June 30, and 151% higher than the average price for the first half of the year (₩44,600). It is also significantly above the current trading price of common shares with full voting rights.” The company added that Hanwha3U B shares are functionally equivalent to Hanwha1U and are trading at similar levels (around ₩40,000), reinforcing the fairness issue.



As news of the minority shareholders' demands spread, discontent has reportedly begun to emerge among Hanwha’s common shareholders as well, potentially escalating shareholder tensions.



Hanwha concluded, “We are closely reviewing follow-up measures such as off-market share repurchases to ensure liquidity for remaining shareholders even after delisting. We remain committed to making fair and responsible decisions that protect the interests of all shareholders and uphold market integrity.”

 

 

 

 

[ⓒ AlphaBIZ. 무단전재-재배포 금지]