 |
| SK Innovation (SKI) CEO Kim Jun speaks at a shareholders meeting at the company's headquarters in central Seoul, Thursday. Shareholders approved the company's plan to split-off its battery business as an independent entity at the meeting. Courtesy of SKI |
By Kim Bo-eun
SK Innovation's (SKI) share price fell Thursday, following shareholder approval of the company's plan to separate its battery business as a new entity.
SKI's stock closed at 237,000 won, down 4.44 percent from Wednesday's close, after shareholders voted for the split-offs of the battery, and oil exploration and production businesses at a shareholders meeting held at the company's headquarters in central Seoul.
The planned split-off had raised concerns about the remaining entity, left with the unpromising conventional petrochemical business. SKI's stock has been on a downward trajectory since the company unveiled this plan in July. Prior to the announcement, SKI's stock hit 302,000 won during intra-day trading June 24.
Retail investors of SKI were irked by the plan, because of the method the company chose to separate the new businesses. Under the split-off, SKI shareholders do not get shares in the new battery company, which prompted some to file a petition on the Cheong Wa Dae website, Aug. 20, demanding SK Group Chairman Chey Tae-won take responsibility for the losses they could face.
Taking these complaints into account, SKI also passed revisions to the company's statutes that would enable dividends to be offered via stocks. This revision is seen to have been made to provide SKI shareholders with more shares in SKI, its battery materials affiliate SKIET, or possibly even the new battery company.
"This is an inevitable decision to gain the upper hand in the face of increasingly fierce global competition to enhance each business's expertise and competitiveness," SKI CEO Kim Jun said at the meeting. "We will make the most out of this split-off to expedite the qualitative and quantitative growth of our company by sharpening our competitive edge with the establishment of distinctive and customized management systems."
 |
| SK Innovation (SKI) CEO Kim Jun speaks at a shareholders meeting at the company's headquarters in central Seoul, Thursday. Courtesy of SKI |
The split-off of the battery business is a means to raise funds needed for future investment, via an IPO. SK is investing aggressively to scale up its battery production as it aims to rank in the world's top three electric vehicle battery makers ― it currently ranks around fifth in the global market.
SKI needs to invest 3 trillion won into a planned joint venture with U.S. carmaker Ford, and also needs to spend 1.23 trillion won through December 2024 to build its fourth battery plant in China.
The battery business has secured 1 terawatt-hours in book orders, and accordingly needs to expand its annual production capacity to 200 gigawatt-hours by 2025. SK is currently capable of producing 40 gigawatt-hours annually.
However, Kim said the battery company will not rush into a stock market listing.
"It will be better to carry out the IPO at a time the company can show the market improved earnings, and that the company's aim is attainable, and its corporate value is acknowledged by the market," Kim said after the meeting.
SKI's battery business is expected to become profitable on an annual basis from 2022, and aims to maintain a high single digit operating margin starting 2025.
The two new companies will launch Oct. 1. The battery firm will encompass businesses spanning EV batteries, battery as a service and energy storage systems. The oil exploration and production company will also be in charge of carbon capture and storage.
SKI said the remaining entity, as a holding company, will focus on identifying and developing new green businesses such as battery metal recycling to maintain competitiveness.
![[PHOTOS] Kep1er returns with 'Magic Hour' to mesmerize fans](https://img.koreatimes.co.kr/upload/thumbnailV2/cd6a652dcfe345fe92b760583c5eb68a.jpg/dims/resize/178/optimize)
