SK Innovation Sets Foundation to Become Global No.1 in Separator Business

[Asia Economy Reporter Park So-yeon] SK Innovation has laid the foundation to become the global No.1 in the separator business, a core battery material used in electric vehicles and more. SK Innovation’s separator business subsidiary, ‘SK IE Technology (hereinafter SKIET)’, which was spun off last year and is currently pursuing an IPO, has decided to conduct a third-party allotment rights offering.

On the 23rd, SK Innovation held a board meeting and announced that it resolved to sign a contract with financial investors to promote SKIET’s third-party allotment rights offering (Pre-IPO; Initial Public Offering).

To this end, SKIET held a board meeting a day earlier on the 22nd and approved the promotion of the third-party allotment rights offering. A third-party allotment rights offering is a form of fundraising where a certain stake is sold to investors before the official IPO.

Through this third-party allotment rights offering, SKIET will issue 6,274,160 common shares, equivalent to 10% of the total shares (post-issuance basis), and transfer them to Premier Partners, a domestic private equity fund (PEF) management company, at 47,816 KRW per share, raising approximately 300 billion KRW. As a result, SK Innovation, which currently holds 100% of SKIET’s shares, will have its stake adjusted to 90%.

This third-party allotment rights offering has laid the groundwork for the successful promotion of SKIET’s IPO scheduled for next year. Currently, the securities industry values SKIET’s corporate value at around 5 trillion KRW. The amount for this rights offering was decided considering the valuation and IPO discount rate.

All funds raised through the rights offering will be incorporated into SKIET. SKIET plans to use these funds as investment capital going forward.

SKIET currently owns a separator production plant, a core battery material, in Jeungpyeong, Chungcheongbuk-do. With the completion of Lines 12 and 13 in 2019, production capacity significantly increased from 360 million square meters per year to 530 million square meters per year.

SKIET is continuing aggressive investments to establish global production bases for separators in response to the explosive increase in battery demand. The new plant under construction in Changzhou, China, with an annual capacity of 670 million square meters, is scheduled to begin phased operations from the fourth quarter of this year through the first quarter of 2022. Additionally, a separator plant with an annual capacity of 340 million square meters under construction in Silesian Voivodeship, Poland, is expected to be completed next year.

Accordingly, by the second half of 2021, the combined production capacity of global bases is expected to reach 1.38 billion square meters, more than doubling the current capacity. SKIET’s strategy is to strengthen its position in the premium separator market and establish a solid foothold through this growth outlook.

Meanwhile, SKIET was spun off from SK Innovation in April 2019. It operates the secondary battery separator business, a future growth engine, and the Flexible Cover Window (FCW) business, which produces transparent polyimide (PI) films. Despite the global economic downturn triggered by COVID-19, the electric vehicle market is expected to continue explosive growth, and SKIET is regarded as operating a promising business. From April 2019 to the end of 2019, SKIET’s sales amounted to 263 billion KRW, operating profit was 80.6 billion KRW, and net profit was 63.7 billion KRW. The operating profit margin reached an impressive 30.6%.

This content was produced with the assistance of AI translation services.