Published : Aug. 26, 2020 - 16:49
Kim Dong-kwan (Hanwha Group)
Hanwha General Chemical is preparing to go public by April 2021 with its value estimated between 4 trillion won ($3.3 billion) and 5 trillion won. The initial public offering is expected to facilitate Hanwha Group’s succession process.
According to Hanwha and industry sources Tuesday, the chemical unit of Hanwha Group is thinking of going public either on Korea’s main bourse, Kospi, or on the US Nasdaq. After selecting an underwriter next month, it is expected to begin the IPO process at the end of this year.
“We are positive that Hanwha General Chemical will meet its IPO timeline. A request for proposals has already been sent out to foreign investment banks,” a Hanwha official said. The company has issued proposals to eight foreign investment banks and will send out invites to domestic brokerages soon.
Hanwha General Chemical is Korea’s No. 1 producer by market share of purified terephthalic acid, a raw material in polyester fabric and plastic bottles. Hanwha Group acquired the company from Samsung Group in 2015. However, Samsung retained a 24.1 percent stake in the company to alleviate the 2 trillion won financial burden that Hanhwa faced ahead of the acquisition. In return, the two groups signed a contract to take the company public by April 2021.
The IPO is expected to support the succession of Kim Dong-kwan -- the eldest son of Hanwha Group Chairman Kim Seung-youn -- who holds a 50 percent stake in H-Solution.
H-Solution, wholly owned by Kim Dong-kwan and his two brothers, controls 100 percent of Hanwha Energy, which in turn holds the biggest stake in Hanwha General Chemical, 39.1 percent. Under this structure, the three heirs can benefit from Hanwha General Chemical’s IPO.
By Kim Byung-wook (kbw@heraldcorp.com)