SK Innovation Co., the leading South Korean electric vehicle battery manufacturer, plans to boost its transition into an environment-friendly company. Currently, SK Innovation expects an increase in its asset sales from this year, aiming to raise over 5 trillion won ($4.5 billion). According to the battery maker, it would use the proceeds to expand facility capacities and uphold SK Group’s ‘financial story.’ Since 2020, SK Group has maximized its asset use and fostered growth in new business areas, including biotech, hydrogen fuel, and semiconductors.
In April, SK Innovation finally cleared up its two-year legal dispute with LG Energy Solution regarding a battery-related trade infringement. Under the agreement, SK Innovation would pay 2 trillion won ($1.8 billion) to LG Energy Solution. Besides dropping all legal actions against each other, the two vowed to keep from filing lawsuits over the next decade.
Cutting Back on Petrochemical Assets
Following the two companies’ settlement, SK Innovation quickly moved forward with its plan to shift into an eco-friendly company. To this end, the company cashed in shares worth 2.4 trillion won ($2.1 billion) from its two subsidiaries, SK IE Technology and SK Lubricants. Furthermore, in 2019, SK Innovation sold its shares in two Peruvian gas fields to the Argentinian gas company Pluspetrol. Accordingly, the battery-to-petrochemical company would obtain 1.2 trillion won ($1 billion) from the transaction.
Earlier, SK IE Technology filed for an IPO and marketed its shares at 105,000 won apiece. As a result, SK IE Technology’s IPO became the most extensive listing in South Korea in four years. Moreover, the EV battery separator-manufacturing subsidiary raised 1.3 trillion won ($1.1 billion) in cash for its parent company, SK Innovation. SK IE Technology’s shares would also debut on the Korean Exchange this May 11.
Additionally, the battery maker sold a 40% SK Lubricant share to IMM Private Equity for 1.1 trillion won ($980 million). After this deal, SK Innovation plans to sell a 49% SK Global Chemical share to focus on ESG-related initiatives. SK Innovation estimates the transaction to raise more than 2 trillion won.
Investing in Eco-Friendly Resources
SK Innovation also plans to use the expected 5 trillion won ($4.5 billion) proceeds to set up additional EV battery factories. As part of its ESG management goals, SK Innovation would develop more eco-friendly products, including hydrogen fuel cells. Recently, the battery manufacturer started recruiting workers for the commercial operation of the two Georgia plants currently under construction.
SK Innovation’s CEO Kim Jun also shared its plans to make further investments in the US to increase production capacities. In particular, the company plans two constructs two more plants in the US, creating an additional 6,000 jobs by 2025. Kim also said that the company would establish its third EV battery factory in Hungary.
Additionally, last month, the battery maker partnered with Hyundai Motor Group to develop hybrid EV batteries and boost green vehicle technologies. Another SK Innovation subsidiary, SK Incheon Petrochem, would set up a liquid hydrogen plant with a 30,000-ton annual production capacity. Similarly, SK Innovation’s parent company SK Group continues to expand its hydrogen fuel businesses with an 18 trillion ($16 billion) investment.
