SK on tapping domestic public institutions for $1.5 bn pre-IPO funding

[Graphics by Song Ji-yoon]

SK on Co., a pure-play battery maker under South Korea’s SK Group, has turned to domestic institutions as well as private equity funds to raise up to 2 trillion won ($1.5 billion) in pre-initial public offering (pre-IPO) placements to fund its aggressive overseas expansion.

According to multiple sources from the investment bank industry on Sunday, a consortium of Korea Investment Private Equity, EastBridge Partners, and Stella Investment which already pledged funding to SK on is tapping cash-rich public institutions like the National Pension Service, MG Community Credit Cooperatives, and Korea Teachers’ Credit Union to bring them onboard as limited partners (LP).

The PEF consortium estimated SK on’s unlisted value at 22 trillion won and is hoping to pool up to 2 trillion won for the battery maker.

The project financing will go to purchase of SK on’s convertible preferred shares paying 5 to 6 percent in annual dividend.

SK on, which demerged from SK innovation in 2021, has turned to domestic institutions amid stalled pre-IPO financing from global funds.

The key to success in domestic fundraising would be the participation of institutional big brother NPS, which had opposed to the spinoff of battery maker last year, according to bank sources.

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