South Korea's FSS orders second revision to Hanwha Solutions share sale plan

South Korea's financial regulator Friday ordered Hanwha Solutions to revise its securities filing for a proposed 1.8 trillion won share offering, marking the second time this year the agency has blocked the energy company's capital-raising plan.

The repeated rejections signal tightening disclosure standards for large share issuances in South Korea, with Hanwha Solutions now facing a third round of regulatory review as it tries to shore up its finances against slowing solar energy and petrochemical markets.

The Financial Supervisory Service determined that Hanwha Solutions' revised registration statement failed to meet formal requirements and contained unclear or missing information on key issues that could prevent investors from making informed decisions, according to the Korea Times. The regulator suspended the filing without accepting it.

The FSS made a similar revision request April 9 after Hanwha Solutions announced March 26 it planned to raise 2.4 trillion won — roughly $1.6 billion — through a new share issuance. The company subsequently cut the offering to 1.8 trillion won in its revised plan, but regulators found the revised disclosure still fell short of required standards.

Hanwha Solutions said it took the regulator's feedback seriously and would submit another revised filing that incorporates input from shareholders and media coverage, the Korea Times reported.

The company had said the offering was necessary to repay debt and improve its financial structure as global markets for solar energy and petrochemicals have weakened. Hanwha Solutions also cited the risk of a potential credit rating downgrade as a key driver of the capital raise.

The protracted review process drew fresh scrutiny to the company's decision-making. The original share sale plan had already faced criticism from investors when it was first disclosed March 26.

Hanwha Solutions must now submit a third revised securities filing before its proposed share offering can move forward.