SK On to accelerate global expansion with latest round of funding
Despite the unfavorable trend in the global financial environment for attracting new capital, the growth potential of the electric vehicle (EV) battery business and SK On’s technological competitiveness have been recognised in the capital market.
SK On, the battery arm of South Korea’s SK Innovation, has secured USD944 million from investors in its recent round of funding in preparation for an initial public offering (IPO).
SK On has been actively pushing forward with long-term financial investments to ensure continuous growth of its battery business and secure investments.
Parent SK Innovation approved the equity investment agreement with a consortium of financial investors, led by private equity fund MBK Partners, under which the battery maker will receive USD800 million. SNB Capital, a subsidiary of Saudi National Bank (SNB), will also contribute USD144 million.
The latest funding adds to the KRW3.2 trillion (USD2.43 billion) SK On has secured from SK Innovation and other investors. That raises the total funding SK On has secured so far to KRW4.4 trillion (USD3.3 billion).
The round of funding will help SK accelerate efforts to pool financial resources before it launches the process for its IPO.
In a separate filing, SK Innovation said it will provide debt guarantees for SK On’s KRW2 trillion (USD1.5 billion ) loan from Hyundai Motor Co. and Kia Corp.
SK On and Hyundai Motor are building a KRW6.5 trillion (USD4.9 billion) electric vehicle battery manufacturing facility in the U.S. state of Georgia.
SK On has remained in the red and is aiming for a turnaround amid an aggressive overseas push. It is targeting an increase in its annual production capacity to 220 gigawatt hours (GWh) by 2025, from 88 GWh in 2022.