Hanwha Aerospace Shares Plunge After $2.5 Billion Rights Offering

Hanwha Aerospace's shares dropped significantly following the announcement of a 3.6 trillion won ($2.5 billion) rights offering, with prices falling as much as 16% to their lowest levels since February. The company plans to issue approximately 5.95 million shares at 605,000 won each, a move viewed by analysts as potentially dilutive to existing shareholders. Proceeds from the offering are earmarked for investments in both domestic and overseas defense facilities, as well as joint ventures in Europe and the Middle East to bolster production capabilities. Despite a strong performance earlier in the year, with shares increasing nearly 90% by early 2025, investor sentiment has turned negative due to concerns about share dilution and the necessity of the capital raise. Financial regulators are set to review the offering due to its scale, marking Hanwha's first rights issuance since 1999. The situation highlights the growing demand for defense spending amid geopolitical tensions, as Hanwha aims to become a major player in the global defense industry.