- SK Innovation to ramp up battery capacity
- News of possible spin off drives shares to three-week lows
- CEO considering dual listing in S.Korea and U.S.
SEOUL, July 1 (Reuters) – SK Innovation Co Ltd (096770.KS) Chief Executive Officer Kim Jun said on Thursday the South Korean company is considering a spin off and a potential listing of its battery business as it also announced plans to boost battery production.
The company said it aims to increase its annual battery production capacity to 200 gigawatt-hours (GWh) in 2025, up 60% from a previously announced goal of 125 GWh. It currently has an annual capacity of about 40 GWh of batteries.
Asked about a possible initial public offering of its battery business, Kim said: “If there is an opportunity, we will review whether to list only on Nasdaq or dual listing as our options.”
“We haven’t decided how to split the battery business … it takes quite a lot of resources to further grow our growing battery business, so we are considering the spin off as one of the ways to secure resources,” Kim added.
SK shares fell as much as 9.3% to a three-week low in early trade, on news of a possible spin off.
While the company has not yet decided on details or a timeline, SK Innovation’s battery business chief Ji Dong-seop said a speedy spin off would allow the company to better support capital expenditure spending for expansion.
SK Innovation’s expansion plan comes as global sales of battery-powered electric cars are expected to have reached nearly 2.5 million in 2020 and are set to rise 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 EV battery market share by 2030, Ji added.
The South Korean battery maker also said it has more than 130 trillion won ($115 billion) worth of battery orders, which is more than 1 terawatt hours (TWh) worth of batteries, which could power about 14 million electric vehicles.
Shares in SK Innovation were trading down 8.3%, versus the KOSPI’s (.KS11) 0.3% fall around 0239 GMT.
($1 = 1,130.1600 won)
Reporting by Heekyong Yang; Additional reporting by Jihoon Lee; Editing by Christian Schmollinger, Stephen Coates and Ana Nicolaci da Costa
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