South Korea’s battery-related companies draw investments at home and abroad

2023.03.10 14:59:01 | 2023.03.10 14:59:55

SK on logo [Courtesy of SK on]이미지 확대

SK on logo [Courtesy of SK on]

South Korean battery-related companies are gaining interest from local and foreign investors as global demand for electric vehicles are expected to grow.

SK on Co., the world’s fifth-biggest battery maker, plans to raise 500 billion won ($377 million) from domestic institutions by the end of this month, according to the investment banking industry on Thursday. A consortium of Korea Investment Private Equity and EastBridge Partners - two domestic private equity funds that invested about 800 billion won in SK on last year - decided to invest an additional 500 billion won and is in the process of raising the fund. SK on is also negotiating with global investors to raise up to 3 trillion won.

L&F Co., a manufacturer of battery cathode materials, is planning to issue exchangeable bonds worth up to 500 billion won. The company is said to be aiming to attract foreign investors or large private equity funds. In a related development, L&F signed a contract last month to supply high-nickel cathode materials worth about $2.9 billion to Tesla Inc. L&F is also seeking an amendment to its Articles of Association at its upcoming annual shareholders meeting to raise the limit of convertible bonds and bonds with warrants each to 500 billion won from 300 billion won, to attract more investments in the future.

Jaewon Industrial Co., which produces solvent recycling and conductive materials used in battery manufacturing, is also attracting attention from large domestic funds. The company is monitoring the procurement market and sending investment prospectuses to prospective buyers to attract investments worth 400 billion won.

Domestic and foreign funds are also pouring into businesses related to EV chargers. Moderntec Co. is seeking to attract investment from Loop Global Inc., a U.S.-based EV charging infrastructure company. Moderntec started developing technology related to chargers in 2009 and is recognized for its technology in charger production and charging station operation solutions.

The battery market is expected to expand in earnest this year on the back of new orders from carmakers. Many predict that Korean battery companies will advance into overseas markets together with materials companies to benefit from the U.S. Inflation Reduction Act.

The battery-related industry is also one of the major themes leading the initial public offering market this year. EcoPro Materials Co., a unit of battery materials company EcoPro Group which produces precursors used in cathode materials for batteries, plans to begin the process for an IPO this year.

By Cho Yun-hee, Kang Doo-soon, and Yoon Yeon-hae

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