Hanwha, restructuring business through personnel separation... Hanwha Machinery and Service Holdings Company approved for re-listing

On the 23rd, the Korea Exchange made a qualified decision for the relisting of Hanwha Mechanical and Service Holdings, a holding company newly established as a result of a personnel split of Hanwha Corporation (Co., Ltd.), thereby creating the foundation for Hanwha’s business restructuring to proceed in accordance with the planned procedures.

The exchange explained that the preliminary review results for the relisting show that Hanwha Mechanical and Service Holdings meets the requirements for listing on the securities market. The qualified relisting decision means that, after the corporate split, the new legal entity has cleared the first hurdle required for re-entry into the stock market. From the perspective of the enterprise, this is an important process that enables the company to continue financing in the market and to evaluate corporate value even after the split.

Previously, on January of this year, Hanwha Corporation (Co., Ltd.) held a board meeting and resolved a personnel split plan to split the company into two major sectors. The existing Hanwha Corporation (Co., Ltd.) will serve as the surviving legal entity, responsible for the defense, shipbuilding and marine, energy, and finance sectors, while the newly established legal entity, Hanwha Mechanical and Service Holdings, will oversee the technology and lifestyle sectors. This includes technology series companies such as Hanwha Vision, Hanwha Momentum, Hanwha Semiconductor Equipment, and Hanwha Robotics, as well as lifestyle and services series companies such as Hanwha Galleria, Hanwha Hotel and Resorts, and Woori Housing.

A personnel split refers to existing shareholders holding shares of the two companies to be split in proportion to their ownership. Unlike a physical split, shareholders can directly hold shares in the newly established legal entity, so concerns about changes to the governance structure or loss of shareholder value are considered relatively smaller. Hanwha’s reason for separating and re-constructing an operating system for departments with different business natures is also that growth strategies for heavy industries such as defense and energy differ from those for business fields including robots, semiconductor equipment, distribution, and leisure. The purpose is to accelerate decision-making for each business and enable the market to evaluate the performance of each department more clearly.

Hanwha’s personnel split is expected to be completed within July after related procedures such as an extraordinary general meeting of shareholders to be held in June. The market believes that this qualified relisting decision, to a certain extent, reduces uncertainty surrounding the split work. In the future, this trend may drive Hanwha to strengthen the specialization of each business unit and advance initiatives such as attracting investment or re-evaluating corporate value.