Shares of Hanwha Aerospace, a leading South Korean defense and aerospace company, plummeted nearly 15% on Thursday after the company announced a rights issue to raise capital. The move, aimed at funding expansion and debt reduction, has sparked concerns among investors about potential dilution of existing shares.

The rights issue, which allows current shareholders to purchase additional shares at a discounted price, is part of Hanwha Aerospace’s strategy to strengthen its financial position and invest in new technologies. However, the market reaction was swift and negative, with the stock experiencing its sharpest single-day decline in over a year.

Analysts suggest that the drop reflects investor skepticism about the company’s ability to generate returns from the capital raise. “While the rights issue may improve Hanwha’s balance sheet, it comes at the cost of shareholder value,” said Kim Ji-hoon, a Seoul-based market analyst.