Hanwha Systems seeking up to $393M in Kospi IPO

HANWHA Systems Co Ltd, the defence technology unit of South Korean conglomerate Hanwha Group, announced on Monday that it is expected to raise as much as 460.1 billion won ($393 million) for its initial public offering (IPO) and join the benchmark Kospi by the end of next month.

The firm is offering around 32.9 million shares at 12,250 won to 14,000 won apiece, the firm said in a press conference.

The exact share price will be determined on Wednesday through book building before receiving investor orders on November 4-5.

NH Investment & Securities, Korea Investment & Securities and Citigroup Global Markets Korea Securities have been selected as joint sponsors of the offering.

Hanwha Systems will use the proceeds to establish a second data centre and foster its personal air vehicles or air taxi business.

Ahead of its official IPO announcement, Hanwha Systems has been beefing up its businesses successfully through a series of deals.

Last week, it signed a 60 billion won deal with the state-run AgencyforDefenseDevelopment to co-develop an auto-analysis system for military video data acquired via reconnaissance planes and satellites.

The latest deal follows a separate 80 billion-won contract inked in December with the Defense Acquisition Program Administration to provide a state-of-the-art military intelligence management system for the Army, Air Force and Navy.

It also signed a deal worth 30 billion won with the Philippines in August last year to supply a naval ship combat system that could upgrade 3,000-tonne frigates.

Boosted by the deals, it posted an operating profit of 44.8 billion won, which rose 45 per cent year-on-year. Its net profit jumped 193 per cent to 41.2 billion won in the cited period.

Following the Kospi debut, its market cap is projected to rise above one trillion won, according to analysts.

Hanwha Systems’ majority shareholder is currently Hanwha’s aviation and defence unit Hanwha Aerospace, which owns 52.91 per cent stake in the firm.

Established in 2000, Hanwha Systems manufactures hightech defence systems and aircraft engines. The company merged with system integration affiliate Hanwha S&C in August last year.

Its business is divided largely into two parts – defence and information technology.

“Through its Kospi debut, Hanwha Systems aims to become a leader in the global defence and information technology industries,” said Hanwha Systems CEO Kim Yeon-chul.