Hanwha Aerospace, a leading South Korean defense and aerospace company, saw its shares plunge nearly 15% on Thursday after announcing a rights issue to raise capital. The move, intended to fund expansion and reduce debt, has raised concerns among investors about share dilution.
The rights issue allows existing shareholders to buy additional shares at a discount, but the market’s reaction was overwhelmingly negative. Analysts attribute the sharp decline to investor skepticism about the company’s ability to deliver returns from the capital raise.
“While the rights issue may strengthen Hanwha’s financial position, it comes at the expense of shareholder value,” said Lee Hyun-woo, a market analyst in Seoul.
The drop marks one of the company’s worst single-day performances in recent years, highlighting the challenges of balancing growth with investor confidence.
