이 기사는 2021년 11월 01일 07시43분 thebell에 표출된 기사입니다

Hanwha Solutions’ sale of a minority stake in its advanced material business has attracted interest from large private equity firms, increasing the likelihood of a successful sale as the Seoul-based company is eager to secure cash to invest in future growth drivers.

Hanwha Solutions, part of South Korean conglomerate Hanwha Group, is in talks with private equity firms interested in acquiring about a 49% stake in its advanced materials division, according to industry sources.

The sale talks began in early October, with Hahn & Co, SkyLake Equity Partners and Glenwood Private Equity in the race for the stake. They have been conducting due diligence for the past few weeks. A final decision is expected in mid-November given a due diligence process normally takes four to five weeks.

Hanwha Solutions was created in January 2020 after a merger of Hanwha’s solar and chemical arms. It has been sounding out market interest in its advanced materials business as part of efforts to improve its financial position.

The sale process is gaining momentum as the company steps up investments in renewable energy. In August Hanwha Solutions announced its takeover of a 100% stake in French renewables developer RES Mediterranee SAS for 727 million euros ($849 million).

Hanwha Solutions plans to carve out the advanced materials business and hand over a 100% stake in its Chinese polyvinyl chloride unit, Hanwha Chemical Ningbo, to the newly created entity. The proceeds from a potential sale of a 49% stake in the new entity will be used to repay existing debt and improve the company’s financial position.

The key to the deal is an agreement between the seller and prospective buyers on the business’s valuation, industry watchers said. The division produces light composite and solar materials, with glass fiber mat reinforced thermoplastics (GMT), flexible copper clad laminate (FCCL) and EVA sheets among its key product lines.

The company’s GMT brand StrongLite is plate-shaped polypropylene resin reinforced with glass fiber mat. It has strength levels comparable to steel but with 20-25% less weight. It is used to make auto parts such as undercovers, plastic bumpers and seat back frames. The product holds the largest share of about 70% in the global market.

LinkTron, the company’s FCCL brand, is a key material to make flexible printed circuit boards – composed of polyimide film, copper foil and special adhesives – which are used to manufacture digital electronic devices such as smartphones and wearable gadgets. LinkTron has the second largest share of roughly 42% in the domestic market.

EVA sheets are a polymer-based component used to manufacture photovoltaic modules. Hanwha Solutions’ EVA Sheet has the fifth largest share of about 6% in the global market.

Hanwha Solutions’ advanced materials business has been unprofitable for the last three straight years, partly due to high price volatility. It is expected to turn to a profit this year, with analysts predicting an operating profit of 25 billion won ($21.4 million) on revenue of 898 billion won for the full 2021 year. (Reporting by Ha-na Suh)