SK Innovation will split off its battery unit into a wholly-owned subsidiary, a local media reported Tuesday.

According to Herald Business, the Korean-language sister paper of The Korea Herald, SK Group chose a split-off over a spin-off to carve out the battery business, in a CEO meeting held earlier this year.

In a spin-off scenario, the envisioned business would have become a subsidiary under SK Group, with SK Holdings and SK Innovation each holding a 33.4 percent stake in it.

SK Innovation had initially planned to propose the split-off plan as one of the agendas to discuss at the board of directors meeting in the first half of this year and gave a heads up to board members. However, due to the legal battle with LG Energy Solution, SK Innovation postponed the discussion to the second half of this year, the report suggested.

“SK Innovation has been reviewing the split-off since last year but how exactly it will be conducted has yet to be decided,” an SK Innovation official said.

Industry watchers say that SK Group, which recently sold its professional baseball team to Shinsegae, is trying to secure liquidity through the split-off. Should SK Innovation carve out its battery business and take it public, SK Innovation could later sell its stake in the subsidiary and shore up funds it needs for investments.

By Kim Byung-wook (kbw@heraldcorp.com)