SK On to raise $944 million in pre-IPO funding

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SK On to raise $944 million in pre-IPO funding

The BlueOval SK Battery Park Kentucky in Glendale, Kentucky. SK On and Ford are building two EV plants there. [SK ON]

The BlueOval SK Battery Park Kentucky in Glendale, Kentucky. SK On and Ford are building two EV plants there. [SK ON]

 
SK On will raise $944 million from a consortium led by MBK Partners, its parent company SK Innovation said in a regulatory filing Wednesday. 
 
SK Innovation held a board meeting Wednesday and approved the plan. 
 
The MBK Partners-led consortium, which consists of global financial investors from China and the Middle East, will provide up to $800 million.
 
SNB Capital, an asset management arm of Saudi National Bank, will also offer up to $144 million. 
  
The funds will be used to help SK On, which was split off from SK Innovation in October 2021, accelerate its push for an expansion in the global electric vehicle (EV) battery market amid the rapid electrification trend. 
 
SK On will proceed pre-initial public offering (IPO) by the end of 2026, the filing said. Investing in pre-IPO stocks allows investors to buy company shares at what could be a fraction of the market value, giving a higher return on investment. If companies don't go public within the period that was promised, they are usually required to return the investment plus the interest, though every contract varies.    
 
SK On has raised a total of 4.4 trillion won ($3.3 billion) so far, beating its initial target of 4 trillion won. SK On raised a total of 1.2 trillion won from a local private equity consortium in March and another 2 trillion won from SK Innovation. 
 
SK On runs EV battery plants in Korea, the United States, China and Hungary. Its annual production capacity, which currently stands at 88 gigawatt-hours, will likely increase to 220 gigawatt-hours by the end of 2025. 
 
It is building three plants with Ford Motor in Kentucky and Tennessee and recently announced it would build a $5 billion EV battery plant in Georgia together with Hyundai Motor. 
 
SK On generated an accumulative order backlog of 300 trillion won so far, it said.  

BY SARAH CHEA [chea.sarah@joongang.co.kr]
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