By Park Jae-hyukHyundai Motor is expected to increase expenditures to rescue Hydrogen Energy Network (HyNet), a cash-strapped operator of hydrogen charging stations for passenger vehicles, after Korea Gas Corp. (KOGAS), the largest shareholder of the debt-ridden operator, refused to provide additional financial support, according to industry officials, Monday.
The state-owned natural gas supplier, which has a 28.52 percent stake in HyNet, claimed recently that it is impossible for the company to make additional investments, citing its worsening profitability.
Its remarks show its intention to shift the burden onto the carmaker, the second-largest shareholder of HyNet with a 28.05 percent stake.
“We are also suffering financial difficulties, due to our snowballing losses,” a KOGAS official said. “We finished paying 30 billion won ($22 million) that we should invest in accordance with the joint venture agreement.”
HyNet has experienced cumulative losses since its inception in 2019, resulting in partial capital impairment. It suffered an 8.4 billion won net loss in 2022, compared to a 4.7 billion won deficit in 2021.
In response, the company has increased its capital through the issuance of new shares several times from 2020 to 2022.
However, KOGAS rejected HyNet’s request for a paid-in capital increase this year, as the gas supplier’s debt reached 47 trillion won as of the end of 2023.
If the nation’s largest operator of hydrogen charging stations for passenger cars goes bankrupt, drivers of hydrogen-powered vehicles will face potential inconveniences, prompting Hyundai Motor to face a setback in its ambitious plan to create a hydrogen ecosystem in Korea.
During the CES 2024 trade show in Las Vegas earlier this year, Hyundai Motor Group Executive Chair Chung Euisun told reporters that it is right for the company to prepare for the hydrogen-powered mobility solution not for the current generation, but for the next one.
The carmaker also plans to launch the new version of the Nexo hydrogen-powered SUV next year.
Considering Hyundai Motor’s record profits last year and the declining government budget for the hydrogen economy under the Yoon Suk Yeol administration, industry officials expect the Korean hydrogen industry to rely more heavily on the carmaker.
A Hyundai Motor official declined to comment on this issue.