SK Group will expand its electric vehicle business in China.
According to industry sources on July 15, SK China and SKC Korea signed a memorandum of understanding (MOU) with China’s CIAM Group Limited on July 7 to sell off SK (Chongqing) Lithium Battery Material Company Limited. Both sides expect to sign a formal agreement in Sept. after additional discussions.
SK Lithium Battery Material Company, Ltd., wholly owned by SK China and SKC Korea, produces anode materials, one of the major parts of electric vehicles. SK China owns a 90.91 percent share of the company, while SKC Korea owns the remaining 9.09 percent.
SK is reportedly negotiating the agreement under which it would sell off SK Lithium Battery Material Company, Ltd. in exchange for CIAM Group’s stocks equivalent to a half of its sale price, instead of a total of 110 billion won (US$96.11 million) in cash.
The CIAM Group is a subsidiary of Chinese electric car manufacturer FDG Electric Vehicles Limited that produces electric sedans, buses, and vans.
Once SK receives shares in the CIAM Group, the group can expand its market of electric vehicle batteries, which are currently being produced by SK Innovation, and establish a beachhead for China’s electric car market expansion.
An official from SK said, “The MOU was carried out in a bid to expand the electric car battery business in China through a partnership with a local company. Currently, the MOU is in the non-binding stage which carries no legal binding force.”