Hanwha Aerospace, a leading South Korean defense and aerospace company, saw its shares fall nearly 15% on Thursday after announcing a rights issue to raise capital. The move, aimed at funding expansion and reducing debt, has sparked backlash from investors concerned about share dilution.
The rights issue allows existing shareholders to purchase 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 Choi Min-jae, 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.
