Hanwha sells half of its stake in U.S. hydrogen company Nikola

Input 2021.03.18 15:18 | Revision 2021.03.18 15:45

Hanwha sells half of its stake in Nikola, a U.S. hydrogen company, which was caught up in the’manipulation controversy’. Hanwha plans to invest in the domestic hydrogen business with the funds secured by the sale of shares while maintaining a strategic alliance with Nikola.

Nikola announced on the 17th (local time) that Hanwha plans to sell 10.05 million shares, 50% of its holdings. The equity value is equivalent to $181.1 million (approximately 203.5 billion won) based on the closing price ($16.39) on the day. The sale period is for six months starting in June.

Although Nikola’s share price plummeted due to suspicion of fraud, Hanwha’s stake is twice the value of its investment. Hanwha Energy and Hanwha General Chemical invested $100 million in 2018 to secure a 6.13% stake in Nikola. Green Nikola Holdings, which owns 51% of Hanwha General Chemical USA and 49% of Hanwha Energy, currently owns 22.13 million shares (5.6%) of Nikola.

In an e-mail statement, Nikola said, “Hanwha remains an important strategic partner and plays an active role in the Nicolas Board of Directors.” An official from Hanwha also said, “We will continue to hold 50% of the stake and continue the alliance with Nikola, but we plan to sell some of the remaining shares in view of the stock price trend.” Hanwha explained that it has decided to sell 50% of its stake, but it has not decided whether to sell all of it.

In September of last year, Nicolas was caught up in a’fraud controversy’ when short seller Hindenberg, a research institute, released a report that “Nicolas was built on the basis of dozens of lies. The US Bloomberg News analyzed that the sale of Hanwha’s stake was due to “suspects of fraud”. Nikola’s stock price soared to $79 in early June of last year before the fraud controversy arose.

When the controversy over fraud grew, founder and chairman Trevor Milton eventually resigned. The US Securities and Exchange Commission (SEC) and the Ministry of Justice launched an investigation to determine the authenticity.