SK IE Technology Co. and parent company SK Innovation Co. said they had raised 2.25 trillion won ($2 billion) for the battery component-manufacturing unit’s initial public offering (IPO). In 2019, SK Innovation established SK IET as its material solution provider, enhancing its global competitiveness and boosting material production. In March, SK IET started its IPO filing process as part of its plans to foster the EV battery industry.
Based on stock exchange data, SK IET marketed its offering at 105,000 won per share. Previously, SK IET only priced its offering at 78,000 won each. In the IPO, SK IET sold over 8.6 million shares, while SK Innovation sold another 12.8 million shares. The demand for SK IET shares also exceeded the number on offer, with institutional investors oversubscribing by 1,883 times.
Furthermore, with the $2 billion, the SK Innovation materials subsidiary’s IPO became the biggest South Korean listing in 4 years. In 2017, South Korea’s largest mobile game publisher Netmarble Corp. raised 2.5 trillion won ($2.3 billion) in its IPO. Additionally, the financial service companies Mirae Asset Securities and JPMorgan Chase are managing SK IET’s IPO. Industry watchers also expect the SK IET share trading to begin on May 11.
SK IET’s plans
This April, SK Innovation and LG Energy Solution finally settled their EV battery tech dispute. Accordingly, SK Innovation agreed to pay reparations worth 2 trillion won ($1.8 billion), helping the EV battery industry considerably.
SK Innovation and SK IET are currently expanding their lithium-ion battery cell separator production, increasing output and improving battery stability. SK IET also plans to utilize the IPO earnings to expand manufacturing capacity and improve facilities in China and Poland. Moreover, the company would use the proceeds to upgrade facility equipment and construct plants to meet the global EV demand.
According to Roh Jae-Seok, CEO of SK IET, the IPO strengthens SK IET’s position in the battery separator industry, enabling it to lead sustainable growth in domestic and overseas markets. SK IET’s float also correlates with the increasing first-time share sales among South Korean companies, with more deals underway.
IPO Boom in South Korean Companies
Since January, companies have raised around $2.7 billion from IPO listings in South Korea, surpassing over half of the recorded data during the same time last year. Thanks to the local retail industry’s trading upturn in 2020, South Korean IPOs have increased significantly. As independent investors regularly buy into deals, analysts predict the IPO boom to continue throughout this year.
Major domestic companies have also revealed their plans to file for IPOs in domestic and overseas exchanges. For instance, LG Energy Solution sent out RFPs in January, sharing its goal of going public on South Korean markets. Recently, game developer Krafton Inc. applied for an IPO, filing one of the biggest listings in the country this 2021. KakaoBank Corp., a leading Korean digital lender, would also go public later this year, actively improving its profitability.
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