■ SK Innovation Board of Directors approved the agreement on SK On attracting new long-term financial investors on May 24

■ Secured up to USD 944 million (KRW 1.24 trillion) in total through USD 800 million from MBK Consortium and USD 144 million from Saudi Arabia’s SNB Capital

■ Surpassed the initial target amount (KRW 4 billion); receiving recognition from the capital markets for its products and vision

SK Innovation’s subsidiary for the battery business, SK On, has successfully secured a new long-term financial investment (pre-IPO equity investment). Despite the unfavorable trend in the global financial environment for attracting new capital, the growth potential of the electric vehicle (EV) battery business and SK On’s technological competitiveness have been recognized in the capital market.

On May 24, SK Innovation held a board meeting and approved the item for shareholder agreement for SK On’s investment attraction. The agreement was reached between SK Innovation, SK On, and MBK Consortium. SK On is set to receive an investment of USD 800 million (approximately KRW 1.05 trillion) from MBK Consortium. The MBK Consortium includes global financial investors (FIs) from the United States, the Middle East, and other regions.

Moreover, SNB Capital, a subsidiary of Saudi Arabia’s largest commercial bank, Saudi National Bank (SNB), is also in discussions to invest in SK On through Korea Investment PE EastBridge Consortium and plans to invest up to USD 144 million (approximately KRW 190 billion) in SK On. With this, SK On has secured an additional investment amount of up to USD 944 million (KRW 1.24 trillion) in total.

SK On has been actively pushing forward with long-term financial investments to ensure continuous growth of its battery business and secure preemptive investment resources in the global competition since last year, and its endeavor has been on a roll so far. It is evaluated that the company has been receiving continuous attention from investors, as evidenced by its accumulated order backlog reaching close to KRW 300 trillion.

Until March of this year, SK On had raised KRW 1.2 trillion in investment funds through Korea Investment PE EastBridge Consortium, and received an additional KRW 2 trillion investment from its parent company, SK Innovation, bringing the total amount secured to KRW 3.2 trillion. In addition to this, with the recent additional fundraising of up to KRW 1.24 trillion from global investors, SK On has successfully raised a maximum of KRW 4.44 trillion. The amount surpasses its initial target of KRW 4 trillion in securing investment funds.

Meanwhile, SK Innovation also announced on the same day that it would provide a debt guarantee for SK On’s borrowing of KRW 2 trillion from Hyundai Motor Company and Kia. SK Innovation stated that the company aims to enhance the stability in financing through various means of securing funds by SK On while expecting a synergistic effect with customers through SK On’s stable supply of battery cells and strengthened strategic partnerships.

SK On currently operates EV battery production plants in South Korea, the United States, China, and Hungary. The company plans to increase its annual production capacity from 88 GWh in 2022 to at least 220 GWh by 2025. To achieve this, SK On is expanding its own plants and pursuing joint ventures with car manufacturers, such as Ford and Hyundai Motor Group, to jointly establish new battery production plants.