SK On secures $944m funding to boost output

A view of the construction site for BlueOval, SK On’s joint battery plant with Ford in Kentucky (SK On)

South Korean electric vehicle battery maker SK On has attracted $944 million in funding as part of its push to expand its presence in the burgeoning EV market.

According to its parent company SK Innovation on Wednesday, $800 million will be secured from a consortium led by MBK Partners, the Korea-based private equity firm, which is composed of financial investors from the US and the Middle East.

Another $144 million will be attracted from SNB Capital, an investment banking arm under Saudi National Bank.

“With the latest funding, we plan to boost our battery manufacturing business, including expansion of production facilities overseas,” an SK On official said.

The company’s total secured funding has exceeded 4.4 trillion won ($3.3 billion) this year alone, surpassing its original target of 4 trillion won. In March, it received a 1.2 trillion won investment from a consortium led by Korea Investment Private Equity and EastBridge Partners, and another 2 trillion won from SK Innovation.

As of May, SK On’s order backlog reached about 300 trillion won, with its key clients including Hyundai Motor Group, Ford, Volkswagen and Daimler.

In a regulatory filing on the same day, SK Innovation said SK On will be getting a 2 trillion won loan from Hyundai Motor Group and the parent company will guarantee the debt payments.

SK On and Hyundai Motor Group recently agreed to set up a battery plant in Georgia, US, to supply batteries for 300,000 EVs annually from 2025. Under a plan to ramp up its production capacity to at least 220 gigawatt-hours, SK On is currently jointly constructing three battery plants in the US with Ford -- two in Kentucky and one in Tennessee.

As of last year, the firm’s production capacity stood at 88 gigawatt-hours at a total of 8 plants in Korea, Hungary, China and the US.

The battery maker’s series of investment deals are expected to give more financial stability and lay grounds for the company’s planned stock debut no later than 2026, industry sources said. During an earnings call earlier this month, the company vowed to turn profit in 2024. It logged an operating loss of 344.9 billion won for the first quarter this year.