SK’s EV Battery Material Unit set to Price at Top of Range to Raise $2 Billion: Report

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SK IE Technology, a material business subsidiary of SK Innovation, is set to raise 2.25 trillion won (approximately $2 billion) in the Seoul Initial Public Offering (IPO) of the battery material unit, Bloomberg’s sources said.

SK IE Technology plans to put a price tag of 105,000 won per share, the top of a marketed range, the anonymous sources said. At $2 billion, the IPO of the maker of battery separators will be South Korea’s largest since the country’s largest mobile game developer Netmarble Corp. raised $2.4 billion in 2017, according to data compiled by Bloomberg.

Within the range, 78,000 won to 105,000 won each, the shares were marketed, with SK Innovation selling 12.8 million shares and SK IE Technology selling another 8.6 million. Final pricing is set for later on Monday.

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SK IE Technology’s float comes as South Korea has been predicted to witness a record year for first-time share sales, with a few billion-dollar-plus deals in the pipeline. About $2.7 billion have already been raised by companies through IPOs in Korea since January 1, 2021, more than half of the $5 billion fetched in all of 2020, data compiled by Bloomberg show.

What contributed to a strong 2020 for Korean IPOs was a boom in retail trading in the country, with mom-and-pop buyers piling into deals such as the float by K-pop superstar boy band BTS’ agency. Given the country’s loose monetary policy, analysts expect that enthusiasm to continue this year.

Game development company Krafton Inc., the largest South Korean chemical company LG Chem Ltd.’s battery business, and Korea’s biggest mobile-only bank, KakaoBank Corp., are among the companies planning large offerings this year.

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SK Innovation, found in 2007, the energy and chemicals unit of South Korea’s third-largest conglomerate (Chaebol), SK Group, did not rush into the electric-car battery industry and was a relative latecomer, embracing the technology only as part of a diversification push. 

SK IE technology plans to use the IPO proceeds for capital expenditures related to considerably huge capacity expansion in Europe’s Poland and Asia’s China and the upgrading and maintenance of its existing production facilities and equipment. The company will spend 1.1 trillion won on building new factories in Poland to meet growing demand amid an EV boom in Europe.

According to Bloomberg, “SK IE Technology’s IPO is being managed by Mirae Asset Securities Co. and JPMorgan Chase & Co., assisted by Korea Investment & Securities Co. and Credit Suisse Group AG. Its shares are expected to start trading on May 11.”

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