Hanwha Chemical to Lead Solar Business

Hanwha Group’s solar power business, which is divided into Hanwha Q Cells and Hanwha Q Cells Korea, will be reorganized based on Hanwha Chemical through the merger between Hanwha Advanced Materials, a subsidiary of Hanwha Chemical Corp, and Hanwha Q Cells Korea.
Hanwha Group’s solar power business, which is divided into Hanwha Q Cells and Hanwha Q Cells Korea, will be reorganized based on Hanwha Chemical through the merger between Hanwha Advanced Materials, a subsidiary of Hanwha Chemical Corp, and Hanwha Q Cells Korea.

As Hanwha Group has been simplifying its governance structure, market watchers are wondering how its solar power business, which has been led by Kim Dong-kwan, the eldest son of group chairman Kim Seung-youn and chief commercial officer (CCO) of Hanwha Q Cells Co., will be reorganized.

Hanwha Group has decided to streamline the complicated stake ownership arrangements of its solar power and related material affiliates. As a first step, Hanwha Advanced Materials Corp., a subsidiary of Hanwha Chemical Corp., will absorb Hanwha Q Cells Korea, a company that supplies solar modules to Hanwha Q Cells, the group's subsidiary in Germany. 

The spokesperson of Hanwha Q Cells Korea said, “Hanwha Q Cells Korea will merge with Hanwha Advanced Materials in order to improve management efficiency and secure new growth engines.”

Hanwha Q Cells Korea has been an affiliate of Hanwha Total Petrochemical. Its merger with Hanwha Advanced Materials Corp. has the effect of transferring the group's solar power business from Hanwha Total Petrochemical to Hanwha Chemical as Hanwha Advanced Materials Corp. is an affiliate of Hanwha Chemical. Hanwha Q Cells is a grandson subsidiary of Hanwha Chemical. This means that from now on, Hanwha Chemical will take charge of the group's entire solar power business. 

Hanwha Q Cells Korea’s shareholders include Hanwha Total Petrochemical (50.15 percent), Hanwha Corp. (20.44 percent) and H-Solution Corp. (9.97 percent). They will hand over all of their stakes to Hanwha Advanced Materials. Hanwha Q Cells Korea will be merged by Hanwha Advanced Materials at 0.5796339:1 ratio.

Hanwha Advanced Materials will increase its capital by 502.8 billion won (US$445.55 million), including 63.3 billion won (US$56.09 million) for facility investment, to pay for the acquisition of Hanwha Q Cells Korea. Hanwha Chemical will acquire all of the 6 million new shares to be issued by Hanwha Advanced Materials. The 6 million common stocks will be newly issued at 83,796 won (US$74.25) per share. The merger process will be completed by the end of next month.

Hanwha Group’s solar power business is divided into Hanwha Q Cells and Hanwha Q Cells Korea. It will be reorganized under Hanwha Chemical. Currently, Hanwha Chemical has a 100 percent stake in Hanwha Solar Holdings Co. and Hanwha Solar Holdings owns a 94 percent stake in Hanwha Q Cells. Hanwha Q Cells CCO Kim Dong-kwan, who is in charge of solar power business operation, holds the key.

An official from Hanwha Group said, “Hanwha Advanced Materials has focused on materials for car weight reduction but it has now secured its new growth engine by entering the solar power market with the merger. We also expect to expand business to various areas, such as solar power cells and film solar panels, and maximize synergies among related businesses.”

Copyright © BusinessKorea. Prohibited from unauthorized reproduction and redistribution