SK On will sell $ 2.5 billion in shares to fund battery production

Companies historically involved in the production of lithium batteries, amid the boom in the electrification of transport, are beginning to structurally separate their core businesses in order to then raise funds on the stock exchange. The Korean company SK On is just preparing for a public offering of shares, but before that it is ready to raise $ 2.5 billion through a private placement.

Image source: SK innovation

Image source: SK innovation

According to information Business KoreaThis division of the South Korean conglomerate SK innovation has already attracted financial advisors to enter the capital market – they are Deutsche Securities and JP Morgan. Early next year, the Korean battery maker intends to raise up to $ 2.5 billion through equity sales to institutional investors, and is slated to go public over the next five years.

SK On will play a catch-up role when compared with the success of LG Energy Solution, which already claims to be the second largest manufacturer of traction batteries in the world. However, SK On is already successfully competing with Samsung. By 2023, the latter of the companies intends to increase the annual production of batteries to 85 GWh, and by 2030 they will exceed 500 GWh.

The joint venture with Ford Motor alone will allow SK On to produce up to 129 GWh of battery capacity annually in the United States, and the company also has two facilities in Georgia. In Hungary, a third SK On facility in Europe is to be built, which, in terms of investment volume, will become the largest site for this manufacturer in the region. At least $ 2.5 billion will be spent on the construction of SK On’s fourth facility in China. Thus, in the coming years the company will need at least $ 10 billion for the construction of new enterprises, and so far it has about half of this amount. The public stock market is considered to be one of the most lucrative sources of funding for battery manufacturers.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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