SK Innovation CEO Says He Is Considering A Split And Potential Battery Industry IPO

SEOUL, July 1 (Reuters) – SK Innovation Co Ltd (096770.KS) CEO Kim Jun said on Thursday that the South Korean company was considering a split and a potential list of its battery business as it also announced plans to strengthen battery production.

The company has announced plans to increase its annual battery production capacity to 200 gigawatt hours (GWh) in 2025, up 60% from the previously announced target of 125 GWh. It currently has an annual capacity of around 40 GWh of batteries.

Asked about a possible IPO of its battery business, Kim said, “If there is an opportunity, we will consider whether we should list only on the Nasdaq or on the dual listing as options.”

“We haven’t decided yet how to split the battery business… it takes a lot of resources to further develop our growing battery business, so we are looking at the split as one of the ways to secure resources,” Kim added.

SK shares fell 9.3% to a three-week low at the start of trading, following news of a possible split.

Although the company has not yet decided on the details or a timeline, Ji Dong-seop, head of the battery business at SK Innovation, said that a quick spin-off would allow the company to better support the expenses of the company. investment for expansion.

SK Innovation’s expansion plan comes as global sales of battery-electric cars are expected to reach nearly 2.5 million in 2020 and are expected to increase by 70% in 2021, according to IHS Markit. The company has battery production sites in the United States, Hungary, China and South Korea.

SK’s battery business aims to secure more than 20% of the global electric vehicle battery market by 2030, Ji added.

Ji said the joint venture between SK Innovation and Ford Motor (FN), announced in May, could produce up to 180 gigawatt hours by 2030. read more

The South Korean battery maker also said it had more than 130 trillion won ($ 115 billion) in battery orders, or more than one terawatt hour (TWh) of batteries, which could power around 14 million. of electric vehicles.

SK Innovation shares were trading down 8.3%, compared to 0.3% for the KOSPI (.KS11) around 0239 GMT.

($ 1 = 1,130 1,600 won)

Report by Heekyong Yang; Jihoon Lee Additional Reports; Editing by Christian Schmollinger, Stephen Coates and Ana Nicolaci da Costa

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