SK On, a subsidiary of SK Innovation focused on the battery business, has achieved significant success in attracting long-term financial investment.
Since last year, SK On has secured approximately KRW 5 trillion in funding, establishing a solid foundation to become a leading global company.
On June 8, SK Innovation held a board meeting and approved the shareholder agreement for SK On's investment attraction. This agreement follows the approval received on May 24 for an investment of up to USD 800 million (approximately KRW 1.05 trillion) from the MBK Consortium.
The new agreement involves SK Innovation, SK On, and a new financial investor (FI) who is a member of the MBK Consortium and based in Singapore. The FI is expected to invest USD 400 million (approximately KRW 530 billion) in SK On.
This latest investment brings the total funds raised by SK On to a maximum of KRW 4.97 trillion, surpassing the initial target of KRW 4 trillion by more than 24%.
Previous investments include KRW 1.2 trillion from the Korea Investment PE EastBridge Consortium, KRW 2 trillion from SK Innovation (its parent company), USD 800 million from the MBK Consortium, and USD 144 million (approximately KRW 190 billion) from SNB Capital.
Additionally, when considering Eurobonds worth KRW 1.2 trillion and borrowings of KRW 2 trillion, SK On has secured a total of KRW 8.17 trillion from the end of last year until now.
Amid a challenging global financial environment, SK On's successful equity investment reflects the capital market's recognition of the growth potential of the electric vehicle (EV) battery market and SK On itself.
SK On has been experiencing rapid growth, with its revenue doubling each year and making it the fastest-growing global battery company. In Q1 of this year alone, SK On achieved sales of KRW 3.3 trillion, surpassing 40% of the previous year's annual sales of KRW 7.6 trillion.
Sales for this year are projected to exceed KRW 15 trillion. With the additional investments providing a strong foundation for growth, SK On is now poised to accelerate its expansion of annual production capacity to at least 220 GWh by 2025.
This expansion includes the establishment of new battery factories in China and Hungary, as well as collaborative battery production facilities with automakers such as Ford and Hyundai Motor Group.
“SK On is raising investment funds through various methods, including Pre-IPO,” said an official of SK Innovation. “We will continue to strengthen the company’s financial structure, and accelerate our expansion to the overseas markets by using this solid structure as a foundation.”
Meanwhile, with the series of successes in attracting investment, the financial soundness of SK On is expected to become even stronger. Financial soundness is a key indicator that determines a company’s credit rating.
In the first credit rating received from NICE Investors Service Co., Korea Investors Service Inc., and Korea Ratings, SK On received an excellent rating of “A2+.” Higher ratings allow a company to issue and distribute promissory notes in the capital market.
