SK On, the electric vehicle (EV) battery division of South Korean energy company SK Innovation, is reportedly targeting 2-3 trillion won ($1.6 billion to $2.4 billion) in a new funding round.
The sources who provided this information claim that the funding will mostly come from international investors, and the company aims to finalize the fundraising as early as the end of March.
The previous funding round was in December, when SK On raised 2 trillion won from SK Innovation and 800 billion won from Korea Investment Private Equity and others, with the understanding that an initial public offering (IPO) would eventually take place. The December funding valued the business at 22 trillion won.
See also: SK On raises $1.51 billion from private equity firms to expand EV batteries production abroad
The new funding round is part of SK Innovation’s efforts to strengthen its position in the rapidly growing EV battery market. The company has stated that it will focus its spending on growing SK On this year, despite the fact that it is taking longer than expected for the division to turn a profit.
In the fourth quarter of 2022, SK On accounted for 15% of the company’s revenue. The division operates battery factories in South Korea, China, Hungary, and the United States, and serves clients such as Ford, Volkswagen, and Hyundai.
Despite facing challenges such as a global chip shortage, rising raw material prices and labor costs, unfavorable currency exchange rates, and delays in production increases at its U.S. and Hungarian factories, SK On expects to book a profit in 2024, according to its CFO.
See also: SK On to receive $2.5 billion in additional capital for EV battery business expansion
The company’s U.S. plants are expected to be of particular interest to global investors, given the recent U.S. EV subsidy and increasing demand for domestically produced batteries. This is reflected in the positive outlook of SK On’s cross-town rival, LG Energy Solution, in the North American market.
