South Korea’s SK Innovation is reportedly exploring the sale of its subsidiary SK IE Technology (SKIET) as part of a strategic move to restructure its battery business, according to Maeil Business newspaper. The potential sale is seen as a response to financial challenges faced by SK Innovation’s battery-making unit, SK On, amidst a slowdown in demand for electric vehicles (EVs).
The newspaper, citing an unnamed investment banking source, stated that the sale of SKIET aims to alleviate financial pressures within SK On. SKIET is a key supplier of separators, a crucial component in EV batteries, to major EV battery makers including Panasonic Corp, a partner of Tesla.
SK Group, the parent company of SK Innovation, has reportedly initiated plans to sell the management rights of SKIET and has begun reaching out to potential buyers through major global investment banks. SK Innovation currently holds a 61.2% stake in SKIET, which has a market value of 4.09 trillion won ($3.01 billion) as of the latest valuation.
Responding to Reuters’ request for comment, an SK Innovation official stated, “Nothing has been decided.” Meanwhile, SK On, which counts Ford Motor, Volkswagen, and Hyundai Motor among its clients, reported a widened operating loss of 332 billion won in the first quarter, compared to 18.6 billion won in the previous quarter, attributed to a decline in EV battery shipments. Despite the challenging market conditions, SK On maintains its target to achieve breakeven in the second half of the year.
