SK On wins $909 mn from BlackRock, QIA, MBK consortium

SK On Co., the world’s fifth-largest battery maker, has confirmed it will receive a 1.2 trillion won ($908.7 million) investment for a minority stake from a consortium of US private equity giant BlackRock, Qatar Investment Authority (QIA), North Asia-focused asset manager MBK Partners and others.

The South Korean battery maker’s parent SK Innovation Co. approved a rights offering plan to draw the investment during its board meeting on Wednesday, sources familiar with the matter said.

SK On was valued at 22 trillion won before the consortium’s decision on the investment.

Under the agreement with the investors, SK Innovation will complete initial public offering of SK On by the end of 2026. If the battery maker fails in listing by then, the parent should buy SK On's shares back from the consortium at a compounded annualized rate of 7.5%.

If that doesn’t work, the consortium will secure drag-along rights to sell SK On stakes, held by them and SK Innovation, to a third party.  

Once the investment is executed, SK On will have attracted a total of 4.5 trillion won in investment since its inception in 2021, including 1.3 trillion won from the Korea Investment Private Equity-led consortium and 2 trillion won from SK Innovation.

SK On will use the new funds to expand its global manufacturing facilities. The company is aiming to increase its annual EV battery production capacity from 88 gigawatt-hours (GWh) as of end-2022 to more than 220 GWh by the end of 2025.

The company and auto giant Hyundai Motor Group announced last month they will invest a combined 3 trillion won to build EV battery facilities in the US state of Georgia with an annual capacity of 25 GWh.   

The facility, scheduled to start commercial operations in 2025, will provide cells for some 300,000 EVs to be manufactured at Hyundai’s first dedicated EV facilities under construction in Savannah, Georgia.

Write to Jun-ho Cha at chacha@hankyung.com
 


Jihyun Kim edited this article.