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SK On's electric vehicle battery plant in Hungary South Korea’s SK Innovation Co. is not currently considering an initial public offering of its battery subsidiary, an executive said on Friday, defying sustained speculations that SK On Co. may go public.The energy and chemical affiliate of South Korea’s No. 3 conglomerate SK Group plans to invest $3.3 billion in SK On this year as the electric vehicle battery maker is expected to turn to black in the fourth quarter.“We are not mulling SK On’s IPO at all for now,” said SK Innovation Chief Financial Officer Kim Yang-seob said during an earnings conference call. “We plan to carefully decide an IPO in consideration of SK On’s growth and speed of profitability improvement.”SK Innovation has said it did not have a plan for an immediate IPO when SK On was founded, but some industry sources speculated possibilities of a listing.Its larger rival LG Energy Solution Ltd., the world’s No. 2 battery producer, earlier this week made a trading debut on South Korea’s main stock market, becoming the second-largest company by market capitalization in the country.CONTINUOUS MAJOR INVESTMENTSK Innovation said it will continue to make major investments in the battery unit. In 2022, the company will spend 4 trillion won ($3.3 billion) in SK On among SK Innovation’s total capital expenditure of up to 6.4 trillion won.Such an investment is unlikely to undermine SK Innovation’s financial structure, Kim said.“We will raise investment funds through joint partners or strategic and financial partners rather than borrowings,” he said.SK On, wholly owned by SK Innovation, is expected to keep reporting operating profit after achieving a breakeven point in the fourth quarter, according to the parent company.The battery unit’s sales are forecast to nearly double to 6 trillion won this year once its first US plant and the second factory in Hungary start commercial operations. Its operating margin is predicted to rise to mid-single-digit in 2025 when BlueOvalSK, a joint venture between SK and Ford Motor Co., kick off battery production.Last year, SK Innovation generated 3 trillion won in sales from its battery business, nearly double 1.6 trillion won in 2020.By Byung-Uk Dododo@hankyung.comJongwoo Cheon edited this article.
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