South Korean shipbuilder Hanwha Ocean is embarking on a KRW 2 trillion ($1.5bn) exercise as it moves to raise cash to grow and transform its shipbuilding and maritime defense solutions.
Hanwha said its board of directors approved a plan to offer KRW 2 trillion of common stocks with the aim of securing a revenue of KRW 30 trillion by 2040.
The company said the increase would be made through a general public offering of stocks following a shareholder allocation process.
Hanwha, which completed its buyout of shipbuilder Daewoo Shipbuilding & Marine Engineering in May, said it plans to use KRW 600bn of the proceeds to make “significant investments” in eco-friendly propulsion systems and solutions that use ammonia, methanol and hydrogen, while also creating vessels to carry these products.
It also plans to invest in smart ships with fully automated navigation. “The company has set a goal to achieve 'level 4' autonomous operation in smart ship technology by 2030,” Hanwha said.
The shipbuilder aims to spend KRW 200bn in the global offshore wind power market, which it said is growing at an annual rate of 18%.
“The company also aims to become a 'total solution provider' for the offshore wind business by offering a full range of value chain services,” it said, including wind turbine installation vessels.
Hanwha is also aiming to splash out KRW 300bn to transform itself into a smart shipyard with what it said would be “superior productivity driven largely by automation”. It said this would address the dwindling number of skilled production jobs due to an ageing workforce.
In addition, the shipbuilder, which is part of the defence-focussed Hanwha Group, said it would use KRW 900bn of the cash raised for its maritime defence expansion, particularly in unmanned and advanced technology and to establish secure overseas production bases in the US and Europe.
These measures come at a time of increasing geopolitical tensions, which have triggered a surge in defence budgets worldwide. Over the next decade, the global warship and naval vessel market is projected to grow to $986 billion, and as part of this growth, Hanwha Ocean plans to tap into the global submarine and surface ship market, which is estimated to be worth up to $243 billion.
Announcing the fundraising Hanwha spoke of becoming a “global ocean solution provider, spearheading the paradigm shift in the future maritime industry.”
New Hanwha Ocean chief executive Kwon Hyek-woong said: “This is a significant step towards securing future growth engines in response to climate change and the global security crisis,” said Kwon Hyek-woong, CEO of Hanwha Ocean.
“Through this substantial investment, we aim to not only maximise the inherent competitiveness of shipbuilding but also become a global innovative company that provides solutions to the world’s security and climate change in the maritime industry.”
