SEOUL: SK Innovation Co Ltd chief executive officer Kim Jun said yesterday the South Korean company was 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 aimed to increase its annual battery production capacity to 200 gigawatt-hours (GWh) in 2025, up 60% from a previously announced goal of 125GWh. It currently has an annual capacity of about 40GWh 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.
This is 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 electric vehicle (EV)battery market share by 2030, Ji added.Ji said that the joint venture between SK Innovation and Ford Motor, announced in May, could produce up to 180GWh by 2030.
The South Korean battery maker also said it has more than 130 trillion won (US$115bil or RM478bil) worth of battery orders, which is more than one terawatt hours worth of batteries, which could power about 14 million EVs.
Shares in SK Innovation were trading down 8.3%, versus the the Korea Composite Stock Price Index’s 0.3% fall around 0239GMT. ― Reuters