Failed to meet financial covenants for a 370-billion won foreign currency loan.
Operating losses exceeded 300 billion won for two consecutive years.
Eyes on domestic and international IR sessions to quell market controversy.
Hanwha Solutions is facing a daunting financial hurdle as corporate bonds worth 280 billion won are set to mature this year. Compounding the crisis, the company has reportedly failed to meet the financial covenants for a 370-billion won foreign currency loan.

The renewable energy and chemical giant has recorded operating losses in the 300-billion won range for two consecutive years. During this period, the company’s interest expenses alone have surged past the 1-trillion won mark, highlighting a deteriorating cash flow situation.

To soothe investor backlash, Hanwha Solutions plans to hold series of Investor Relations (IR) sessions for domestic and international institutional investors. The industry is closely watching whether the company can successfully justify its massive rights offering and present a convincing vision for future growth.

 
A Mountain of Debt and Mounting Interest
According to industry sources on April 1, Hanwha Solutions faces a string of maturing corporate bonds: 170 billion won in June, 50 billion won in August, and 60 billion won in October.

The company’s financial health has been severely compromised by a prolonged slump in business performance. Last year, Hanwha Solutions posted an operating loss of 364.8 billion won, marking its second straight year of losses in the 300-billion won range. Excessive debt has played a significant role in these losses; the company paid 550 billion won in interest in 2024 and 540 billion won in 2025, totaling over 1 trillion won in just 24 months.

Breach of Covenants and Liquidity Risks
The company’s latest business report reveals further distress regarding its European subsidiary, Q Energy Solutions. A foreign currency loan of 215 million euros (approx. 370 billion won) has been reclassified as current liability. Although the original maturity date is February 2028, the company failed to meet the specific financial "covenants" attached to the loan.

Specifically, Hanwha Solutions failed to maintain a Net Debt-to-EBITDA ratio of 5x or less. While the company clarified that this breach does not trigger a cross-default on other bonds or borrowings (Loss of Benefit of Time), it adds significant pressure to its short-term liquidity profile.

As of the end of last year, the company's debt-to-equity ratio stood at 196.3%, a 13.1 percentage point increase from the previous year.

The 2.4-Trillion Won Gamble: Rights Offering
In a desperate move to stabilize its balance sheet, Hanwha Solutions is pursuing a 2.4-trillion won rights offering. The company intends to allocate 1.5 trillion won (62.5%) of the proceeds toward debt repayment.

However, the plan has been met with fierce criticism. Investors argue that the company failed to communicate the necessity of such a massive dilution effectively. On March 26, the day the plan was announced, stock prices plummeted by 18.2%.

Efforts to Restore Market Confidence
In response to the "surprise" announcement, Hanwha Solutions is launching an aggressive IR blitz. On April 2, the company will hold an explanatory session for domestic investors in Yeouido, Seoul. Following this, Chief Financial Officer (CFO) Jung Won-young will lead an overseas roadshow in Singapore and Hong Kong starting April 6.

To signal "responsible management," top executives are putting their own capital on the line. Vice Chairman Kim Dong-kwan committed 3 billion won to purchase shares, and four independent directors have pledged to participate in the rights offering.

Analyst Perspectives
Market analysts remain cautious. Lee Jin-ho, a researcher at Mirae Asset Securities, noted, "While the rights offering is positive for improving the chronic risk of the financial structure, the negative impact of equity dilution due to the issuance of new shares is currently perceived as a greater burden."

Jun Yu-jin, a researcher at IM Securities, expressed similar sentiment: "While the company’s general situation and efforts are understandable, it is deeply regrettable that such a massive dilution—approaching 40%—was executed abruptly amidst the stock price strength seen since the beginning of the year."