SK Innovation Co Ltd Chief Executive Officer Kim Jun said on Thursday that the South Korean firm is mulling a spin-off and possible IPO of its battery division, as well as plans to increase battery output. The company stated that its yearly battery production capacity will expand to 200 gigawatt-hours (GWh) in 2025, up 60% from a previously stated goal of 125 GWh. It now has a battery capacity of around 40 GWh per year.
“If there is an opportunity, we will assess whether to list only on Nasdaq or dual list as our alternatives,” Kim said when asked about a possible initial public offering of its battery business.
“We haven’t decided how to divide the battery business,” Kim explained. “It takes a lot of resources to further build our burgeoning battery business, therefore we are evaluating the spin off as one of the strategies to secure resources.”
On rumors of a prospective spin-off, SK shares plunged as much as 9.3% to a three-week low in early trade.
SK Innovation’s battery division leader Ji Dong-seop said a quick spin off would allow the company to better support capital expenditure investment for expansion.
According to IHS Markit, global sales of battery-powered electric automobiles are predicted to reach almost 2.5 million in 2020 and to increase by 70% in 2021. Battery production facilities are located in the United States, Hungary, China, and South Korea. According to Ji, SK’s battery division aspires to secure more than 20% of the worldwide EV battery market share by 2030. According to Ji, the SK Innovation-Ford Motor joint venture, which was unveiled in May, could produce up to 180 gigawatt-hours by 2030. The South Korean battery manufacturer also announced that it has received more than 130 trillion won (US$115 billion) in battery orders, equivalent to more than 1 terawatt hour (TWh) of batteries, enough to power roughly 14 million electric vehicles.
Around 0239 GMT, shares in SK Innovation were down 8.3 percent, compared to a 0.3 percent drop in the KOSPI.
(1 US dollar = 1,130.1600 Korean won)
(Heekyong Yang contributed reporting; Jihoon Lee contributed additional reporting; Christian Schmollinger, Stephen Coates, and Ana Nicolaci da Costa edited the piece.)/n
