Hanwha to face profit squeeze after new preferred share issurance

By Korea Herald

Published : June 23, 2016 - 15:35

- Link copied

[THE INVESTOR] Hanwha Corp.’s decision to raise 400 billion won by issuing new preferred shares may lead to profit squeeze due to growing dividend payments, NH Investment & Securities said in a report on June 23.

The trading unit of Korean conglomerate Hanwha Group said that it would issue new 20 million preferred stocks to enhance its financial stability in a regulatory filing on June 22.

Hanwha Group

Shares of Hanwha shed 1.08 percent to trade at 36,700 won ($US31.90) as of 2:22 p.m.

Kim Dong-yang, an analyst at NH Investment & Securities said investors should bear in mind the equity dilution as the offering will cause a decline in earnings per share and book value per share.

“The new share insurance aims to secure funds for some 351.3 billion won (US$305 million) of remaining acquisition payment for Hanwha Techwin and to improve financial health,” he said.

The firm plans to decide the issue price in September to list the new stocks the following month. Dividend rate for the preferred stocks will be confirmed in August.

By Park Han-na (hnpark@heraldcorp.com)

Korea Herald
Korea Herald
Articles by Korea Herald

Hanwha to face profit squeeze after new preferred share issurance

More from Headlines