iady, Hyundai Asset Management Investment Attraction..."Expansion of Secondary Battery Business"

[Asia Economy Reporter Minji Lee] EID announced on the 5th that it will attract investment of approximately 30 billion KRW through new issuance of convertible bonds from Hyundai Asset Management. The plan is to raise large-scale funds to expand its core business, the secondary battery business.

Hyundai Asset Management plans to acquire 30 billion KRW worth of EID convertible bonds (CB) by establishing a private collective investment vehicle (fund) or private equity fund (PEF). Hyundai Asset Management stated, "We decided to invest because we judged that EID's secondary battery business has high growth potential, and we plan to actively participate in management after the upcoming shareholders' meeting." Currently, the secondary battery market is recording high growth of over 20% annually due to global eco-friendly policy trends, and the market size is expected to reach approximately 14 trillion KRW by 2025.

EID plans to invest the secured funds in secondary battery specialized companies 'KIT' and 'GE'. EID intends to secure additional competitiveness in line with the aggressive management strategy of its major client LG Chem's battery division.

EID stated, "We attracted large-scale investment to respond to the rapidly growing secondary battery market environment and to secure sustainable growth engines through acquisitions of related companies or facility investments," adding, "While attracting this investment, we provided investors with opportunities to participate in management for more transparent management activities and also established financial covenants including achieving positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)."

One of its subsidiaries, KIT, manufactures and installs powder system equipment used in the cathode material production process and holds a high market share in the domestic market. The powder system is a series of equipment that mixes and weighs raw materials used in cathode material production, supplies them to the calcination process (RHK Line), and crushes and packages the calcined products.

In the calcination process sector, KIT has established an almost monopolistic value chain with Japan's Noritake, securing a dominant market position domestically, and its performance is also soaring. Last year, sales reached 38 billion KRW, an 80% increase compared to the previous year (21 billion KRW), and operating profit reached 6 billion KRW, with an operating profit margin approaching 16%.

GE develops and supplies logistics process equipment and solutions, which are essential facilities for the secondary battery manufacturing process. A significant portion of its products and solutions are supplied to LG Chem, and last year it achieved sales of 63.3 billion KRW and operating profit of 4.6 billion KRW.