Hanwha Group, set to take over four Samsung affiliates, has come under questions about the ability to finance the 2 trillion won (US$1.82 billion) deal, while rumors circulate that the country's 10th-largest family-run conglomerate may resort to selling shares of its subsidiaries to raise cash.
   
In November, Hanhwa announced it will acquire four of Samsung Group's chemical and defense affiliates. The announcement immediately raised speculation about how it will secure the needed cash, with some expecting it to offload its shares in Hanwha Galleria Co. and Hanwha Life Insurance Co.
   
The speculation rose further last week after Hanwha Group appeared to leave some room for the possibility, saying in its regulatory filing that "nothing has been decided related to Hanwha's sales of shares in Hanwha Life Insurance." 
   
There are also those who remember Hanhwa's past botched attempt to buy a local shipbuilder.
   
In 2009, the conglomerate gave up its plans to acquire a 50.4 percent stake in Daewoo Shipbuilding & Marine Engineering Co. when it could not raise 6 trillion won for the deal due to the global financial crisis and economic slump.
  
"Companies normally do not have the full cash needed to implement a project. There can be many ways to secure the funds," a Hanwha official said. "The (payment) plan will be prepared by June, when we have to make the first payment."  
  
Hanwha Corp., the holding firm of the group, is scheduled to make payments over a two- to three-year period.  
   
The three Hanwha subsidiaries that will merge with Samsung affiliates hold 300 billion won in cash and earn an annual profit of around 200 billion won. Hanwha Group's cash reserve was estimated at 6 trillion won as of the third quarter of 2014.
   
"Although market watchers are anxious (about the takeover), there are no problems at all. We have enough cash, dividends and asset liquidity, and never thought about having problems in preparing the fund," the Hanwha official said.
   
When the deal is completed, the bulked-up Hanwha Group, whose market value is currently estimated at 37 trillion won, will move a notch up to become South Korea's ninth-largest conglomerate by adding 13 trillion won, according to industry data. (Yonhap)