Hanwha Aerospace on Rights Offering Controversy: "Short-term Stock Dilution... Consider Our Performance and Opportunities"

Michael Coulter, President of Overseas Business
Reveals Insights in Interview with Bloomberg TV in the United States
Close Collaboration with Local Partners in the Middle East, Europe, and Australia

Michael Coulter President of Overseas Business, Hanwha Aerospace. Hanwha Aerospace

Michael Coulter, President of Overseas Business at Hanwha Aerospace, addressed concerns about the recent large-scale rights offering that has raised worries among minority shareholders on the 29th, stating, "In the short term, there may be a slight dilution effect on the share price, but if you look at our performance and market opportunities, you will understand."

"Fully Respecting Minority Shareholder Concerns"

In an interview with Bloomberg TV in the United States, released on this day, Coulter said, "We fully respect the concerns of minority shareholders. We have communicated closely with shareholders and have also revised the plan in part," explaining the company's position.

Previously, on April 8, Hanwha Aerospace announced that it would reduce the size of its shareholder allocation rights offering from 3.6 trillion won, set in March, to 2.3 trillion won. The remaining 1.3 trillion won will be raised through a third-party rights offering in which Hanwha Energy, wholly owned by the owner family, will participate. Typically, large-scale rights offerings result in a dilution of existing shareholder value. There have also been suspicions in the market that some of the funds raised could flow to the Hanwha Group owner family.

Coulter stated, "The market is currently very turbulent," and emphasized, "But it is precisely at times like this that moving quickly can create new market opportunities." He added, "Huge opportunities are opening up, such as in the U.S. shipbuilding market. If we only act in the traditional way, we will miss out on these opportunities."

Transforming into a 'Multi-Domestic Company' by Partnering with Local Firms

The global defense industry is changing rapidly. He noted, "The horrors of ground warfare have not changed," but pointed out that technologies such as artificial intelligence (AI) and unmanned systems have newly emerged. He also remarked, "The pace of technological advancement is incredibly fast."

The company's main export items include the K9 self-propelled howitzer and shipbuilding capabilities. He also highlighted the global shortage of ammunition due to conflicts, stating, "Hanwha started as an ammunition company after the Korean War, and this is our core DNA."

He especially pointed out that a strategic transformation is needed as a global defense company. He said, "Hanwha is evolving from a leading Korean aerospace and defense company into a 'multi-domestic company,'" and added, "For this, local supply is necessary." Multi-domestic refers to a strategy of entering multiple countries and deeply localizing products, services, and operations in each country as if it were a domestic market.

The acquisition of Philly Shipyard in the United States, which has been cited as a stepping stone for entering the U.S. shipbuilding industry, is a representative example of this strategy. He emphasized, "Philly Shipyard is part of this strategy," and "It is for the U.S. market."

He also cited cooperation with Australia as a notable achievement last year, mentioning the 'Huntsman' related to the K9 self-propelled howitzer and the 'Redback' infantry fighting vehicle. For example, the AS9 Huntsman is known to be developed based on the learning and experience of the K9, the world's most popular self-propelled howitzer.

Coulter stated, "We have not only created sovereign advanced technological capabilities within Australia, but also fostered solidarity between the Australian and Korean militaries, as well as between Korean and Australian industries."

On the shipbuilding side, he commented, "The U.S. shipbuilding industry is currently facing enormous challenges, and the situation is deteriorating," and asserted, "We believe we can contribute here."

New Opportunities Sought in Australia, Europe, and the Middle East

He also mentioned seeking opportunities in the Indo-Pacific region, Australia, Europe, and the Middle East. In Europe, he noted, there are political challenges and high defense demand in Eastern European countries. In the Middle East, discussions are underway for cooperation with Egypt, Saudi Arabia, and the United Arab Emirates (UAE).

Coulter stated, "We are discussing building local production capabilities with both Saudi Arabia and the UAE," and added, "It will be a program that respects sovereignty while also responding to security threats." He also expressed hope for tangible results within this year.

He commented that even among Western European countries, which have traditionally taken a conservative stance in the defense market, the situation has changed. He said, "Even just three to four months ago, the market was quite closed and there were difficulties in investment," but "global circumstances have changed this. We are also in discussions for cooperation with Western European partners."

He further reassured, "Korean defense companies are not seeking to invade Europe," and clarified, "It will be in the form of partnerships with existing defense companies, and we plan to cooperate with companies already integrated into the European Union (EU) and North Atlantic Treaty Organization (NATO) systems."

This content was produced with the assistance of AI translation services.