Next Financial Step
SK on, a battery subsidiary of SK Innovation, has successfully secured long-term financial investment.
SK Innovation announced on May 24 that they held a board meeting to approve a shareholder agreement for attracting investment in SK on. The agreement is expected to be signed between SK Innovation, SK on, and the MBK Consortium. SK on is planning to receive up to $800 million (approximately 1.5 trillion won) in investment from the MBK Consortium, consisting of private equity fund (PEF) management company MBK Partners and global financial investors (FI) in the U.S. and Middle East.
Additionally, SNB Capital, a subsidiary of Saudi National Bank (SNB), the largest commercial bank in Saudi Arabia, is expected to invest a maximum of $144 million (about 190 billion won) into SK on through the Korea Investment Private Equity (PE) EastBridge Consortium. Thus, SK on has secured an additional investment amount limited to a total of $944 million (approximately 1.24 trillion won).
SK on has been promoting the attraction of long-term financial investors since last year to secure preemptive investment resources for the continuous growth of the battery business and global competition. The company's accumulated order balance of nearly 300 trillion won (US$227 billion) is drawing continuous attention from investors.
By March of this year, SK on had secured 1.2 trillion won (US$907 million) in investment funds through the Korea Investment PE EastBridge Consortium and received an investment of 2 trillion won (US$1.5 billion) from its parent company, SK Innovation, thereby securing a total of 3.2 trillion won (US$2.4 billion). With this additional fundraising limit of 1.24 trillion won (US$937 million), it succeeded in attracting up to 4.44 trillion won (US$3.36 billion) from global investors, exceeding the original goal of raising 4 trillion won.
Meanwhile, SK Innovation also announced the same day that it is guaranteeing the debt of SK on borrowing 2 trillion won (US$1.5 billion) from Hyundai Motor and Kia. SK on operates electric vehicle battery factories in Korea, the United States, China, and Hungary, and plans to increase its annual production capacity from 88 GWh last year to at least 220 GWh by 2025. It is also pushing for the expansion of its own factories and the establishment of new battery factories in cooperation with vehicle manufacturers such as Ford and the Hyundai Motor Group.