Shares of South Korean defense giant Hanwha Aerospace plunged as much as 14.95% on Friday, after the company announced a rights offering worth 3.6 trillion South Korean won ($2.5 billion) on Thursday.

The company will issue just over 5.95 million shares at 605,000 won apiece, and the new shares will be listed on June 24. Hanhwa estimates that the shares will represent a 13.05% increase in the share base.

Hanwha said in its release 2.5 trillion won will be used to invest in overseas and domestic defense facilities, while the remaining 1.1 trillion won will be used in investments into shipbuilding and drone engines.

The company said it aims to become a “global player” in the aerospace, shipbuilding and defense space.

Hanwha’s shares has surged across the first two months of 2025, jumping almost 90% year to date and powered by an expectation of increased defense spending.

Hanhwa sees defense opportunities globally, especially in Europe, Asia and the Middle East, forecasting revenue to grow around 330% by 2035, and operating profit to climb around 210% by 2035 compared to 2024’s full year results.

The company makes artillery systems, air defense systems and infantry fighting vehicles, and is reportedly the largest exporter of the K9 Thunder 155mm self-propelled howitzer, with variants bought by Poland, India and Turkey.

Analysts CNBC spoke to late last year explained that the appetite for South Korean arms can be loosely based on the mantra of “cheaper, better, faster.”

South Korean arms are seen as lower in cost with faster production, and are almost as good as their top-tier counterparts from other countries.