Despite Deteriorating Market Conditions
SK On, a secondary battery manufacturer of SK Group, is close to receive a pre-IPO investment of over 1 trillion won from domestic and overseas investors. The funding will inject a new vitality into SK On’s plan to invest 15 trillion won over the next three years.
A consortium led by Korea Investment Private Equity (KIPE) has attracted some 600 billion won from domestic investors, while MBK Partners have confirmed investments of about 400 billion won from foreign investors. They will receive letters of commitment (LOC) from some of the investors in mid-December and from the remainder in early January next year.
SK On managed to attract investment despite deteriorating market conditions because it accepted the demands of investors and lowered its corporate value to 22 trillion won, half of its initial level, analysts say. The company estimated its enterprise value at 40 trillion won at the beginning and at over 30 trillion won after starting a full-fledged investment attraction process.
SK On will issue convertible preferred shares (CPSs) for purchase by the Korea Investment Private Equity consortium and an MBK-established fund. Investors can expect additional profits from the listing process, as they can receive dividends as owners of preferred stocks and then convert their shares to common stocks. For SK On, its stake is not diluted and there will be no need to pay dividends if there is a loss while the unit price per share is fixed.