Samsung SDI to raise W2tr through rights offering

Samsung SDI said Friday that it will attempt to raise 2 trillion won ($1.37 billion) through a rights offering, as the Korean battery maker invests in its mid- to long-term growth amid a stalling electric vehicle market.

According to Samsung SDI, its board of directors decided to conduct the rights offering to secure funds for facility investments. The company will issue 11,821,000 new shares, which is a 16.8 percent increase from the current amount of shares.

The new share allocation date is slated for April 18, while the final issuing price will be determined on May 22. The subscription process will be held from May 27 to June 3 in the order of the employee stock ownership association, existing shareholders and the public. The new shares are expected to be listed June 19.

Samsung SDI plans to use the additional funds raised through the rights offering to invest in the joint venture with General Motors in the United States, expand the capacity of its battery plant in Hungary and set up all-solid-state battery lines in Korea.

The battery maker explained that the decision to carry out the rights offering was made considering the battery industry’s nature, which takes about two to three years from facility investments to mass production as well as the future growth outlook for the EV battery market.

Samsung SDI pointed out that global original equipment manufacturers, or auto brands, are maintaining their mid- to long-term EV transition plan despite the concerns over weakening demand for EVs and slowing growth. The battery maker added that market analyzers forecast the EV battery market will undergo high growth with a compound annual growth rate of about 20 percent between 2025 and 2030.

Samsung SDI’s facility investment hit 6.6 trillion won in 2024, up approximately fourfold from 2019. Although this year’s facility investment will be slightly less due to a temporary shrink in demand, the company said it will continue to invest in securing future technologies and production capacity.

"We decided to go forward with a rights issue to accelerate our mid- to long-term growth with a stable financial structure," said Choi Joo-sun, CEO of Samsung SDI.

"We will overcome the current market slowdown by strengthening our technological competitiveness, expanding sales and orders and innovating the cost structure, and prepare for the upcoming supercycle."