Kim Jun, chief executive of South Korea's SK Innovation Co Ltd, said on Thursday that the company was considering spinning off its battery business and promoting its listing. At the same time, they also announced plans to increase battery capacity.
SK Group is the third largest multinational consortium in South Korea after Samsung and LG, mainly with energy and chemical industry and information and communications as the two pillar industries. Its subsidiary SK Innovation entered the field of power batteries in 2005 and is already one of the world's major suppliers of electric vehicle batteries. Mercedes-Benz released the first electric sports car using power batteries made by SK Innovation.
(LG Energy Solution Ltd.), another South Korean battery giant, LG Energy Solutions, officially launched the listing process in June and plans to list in South Korea in the third quarter, with a valuation of 100 trillion won (573.3 billion yuan), which is expected to set a new record for South Korea's largest IPO.
SK Innovation Co Ltd. It plans to increase its annual battery production capacity to 200 gigawatt hours by 2025, an increase of 60 per cent over the previously announced target of 125 gigawatt hours ((GWh),). It is reported that, SK Innovation's current battery production capacity is about 40 gigawatt hours.
Asked whether its battery business could launch an initial public offering of (IPO), Kim Jun said: if there is an opportunity, we will consider listing only on Nasdaq or in South Korea and Nasdaq.
He also said they had not yet decided how to split the battery business. As the further development of the battery business requires a lot of resources in the future, the company is considering spinning off the battery business as one of the ways to obtain more resources.
Although SK Innovation has not released details or listing schedule, Ji Dong-seop, head of the company's battery business, said the spin-off would give the company better access to the capital it needs to expand.
Global sales of battery-powered electric vehicles reached nearly 2.5 million in 2020 and are expected to grow by another 70 per cent in 2021, according to IHS Markit.
SK Innovation has battery production bases in the United States, Hungary, China and South Korea. Dong-seop also said SK's battery business aims to account for more than 20 per cent of the global electric vehicle battery market by 2030.
The South Korean battery maker also said it had battery orders worth more than 130 trillion won ($115 billion), the equivalent of more than 1 terawatt-hour (TWh), which could power about 14 million electric vehicles.
