[Asia Economy Reporter Park Soyeon] The timeline for the initial public offering (IPO) of SK Battery (tentative name) is expected to be longer than the market anticipated.
According to the financial investment and battery industries on the 27th, SK Battery, which was spun off from SK Innovation's battery business, will officially launch as a new corporation on the 1st of next month.
SK Battery faces the challenge of investing approximately 18 trillion KRW in battery production facilities by 2025. This is because large-scale capital investment is necessary to achieve the goal of expanding battery production capacity from the current 40GWh to 85GWh in 2023, 200GWh in 2025, and 500GWh in 2030.
Accordingly, the financial investment industry initially expected SK Battery to expedite its IPO. However, SK Battery’s strategy is to postpone the IPO for a certain period by expanding joint ventures and attracting investments before going public.
An industry insider said, "If preparations for listing start immediately after the launch, an IPO could mechanically be possible around the third to fourth quarter of next year," adding, "However, internally within SK Group, the plan is not to rush the battery IPO but to expand funding through global battery joint ventures."
SK Battery plans to raise about 6 trillion KRW initially by establishing a joint venture for electric vehicle battery cells called 'BlueOvalSK' with Ford, the second-largest automobile company in the United States. Additional global joint venture discussions are reportedly underway. Pre-IPO investment attraction is also being considered. SK Battery has an advantage in fundraising as there have been no fire incidents reported from batteries sold so far.
Internally, SK decided not to rush SK Battery’s IPO to appease existing shareholders during the grace period and to increase corporate value by expanding market share and production scale. Previously, after the battery business was spun off from SK Innovation, the company amended its articles of incorporation to allow stock dividends to appease shareholders who expressed dissatisfaction. It is known that they are considering distributing some shares of the new battery subsidiary to shareholders as dividends.
Hwang Kyuwon, a researcher at Yuanta Securities, analyzed, "Considering the order backlog, SK Battery’s global market share is expected to increase from 4.8% in the first half of 2021 to about 10.5% in 2025," adding, "In this case, the value of the battery division could rise from approximately 10.5 trillion KRW to around 20.4 trillion KRW." When SK Innovation announced the spin-off of SK Battery, it reported the company’s book value (total equity) as 2.1264 trillion KRW, but the actual corporate value is estimated to be between at least 14 trillion KRW and 20 trillion KRW.
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