Hexicon obtains regulatory approval for MunmuBaram

Hexicon has announced that the South Korean Electricity Regulatory Commission (KOREC) has approved the transfer of two out of three Electricity Business Licenses (EBLs) for the MunmuBaram project. This approval allows Hexicon to establish a long-term ownership structure for the project and move it forward towards auction. While we view this development as very positive, it is in line with our expectations, and we therefore maintain our current estimates and valuation.

Hexicon’s acquisition of all the shares in the MunmuBaram project with the EBLs required regulatory approval. To obtain this, Hexicon submitted an application to the South Korean Ministry of Trade, Industry and Energy (MOTIE) in June. After nearly five months of review, KOREC has approved the transfer of two of the three EBLs to Hexicon, allowing the project to move forward effectively. The status of the third EBL remains unresolved and Hexicon is currently exploring various alternatives to address this issue.

A clear milestone and progress toward divestment

The regulatory approval marks a significant milestone for Hexicon, enabling the company to focus on establishing a long-term ownership structure for the next, more capital-intensive phase of the project. Although the third EBL is still pending approval, we view this news positively, supporting our estimate that Hexicon will divest a portion of the MunmuBaram project by Q1’25. This divestment could provide short-term funding and reduce Hexicon’s financial exposure to the project. However, as this development aligns with our expectations, we are not making any adjustments to our estimates or valuation at this time.