Korean battery SK On this week invites bidders for pre-IPO fundraising

[Photo provided by SK Innovation]

SK On Co., a pure-play battery maker that separated from South Korea's SK Innovation last year, will invite pre-IPO funding this week to expedite its overseas expansion.

Deutsche Securities and JP Morgan will lead-manage the pre-IPO fundraising estimated at 3 to 4 trillion won ($3.3 billion)

Given SK On’s valuation at around 25 to 30 trillion won, the successful bidders in the pre-IPO offering could gain 10 to 20 percent stake in the Korean battery maker fast rising through aggressive expansion.

The teasers for preliminary tender have been sent out to multinational private equity funds like Blackstone, The Carlyle Group, KKR, and Texas Pacific Group.

The new capital would mostly fund overseas projects.

SK On in September last year announced it was establishing $9 billion battery joint venture with Ford to build three 129 GWh battery manufacturing plants – two in Kentucky and one in Tennessee – by 2027.

It aims to bolster capacity to 77 Gigawatt hours (GWh) by the year-end from current 60GWh and gradually to 500GWh by 2030 through ramp-ups across the world.

In China, SK On signed a $2.53 billion contract with Yancheng City in Jiangsu Province to start building a new battery plant from this year.

In Hungary, SK On has invested 2.6 trillion won to build its third battery manufacturing plant in Ivancsa.

The company expects to see its first profit this year.

SK On’s revenue rose from 1.6 trillion won in 2020 to 3.4 trillion won last year. It has set this year’s sales target at 6 trillion won. Although it has not specified IPO timetable, it is expected to go public in the footsteps of LG Energy Solution within a couple of years as it would not be able to woo multinational capital without IPO pledge.

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