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SK is close to receiving KRW1tn in pre-IPO investments

SK On’s battery plant in the USA

SK On, a secondary battery maker of SK Group, is about to receive a pre-IPO investment of over 1 trillion won from domestic and overseas investors. The funding will give fresh impetus to SK On’s plan to invest 15 trillion won over the next three years.

A consortium led by Korea Investment Private Equity (KIPE) has attracted around 600 billion won from domestic investors, while MBK Partners has confirmed investments of around 400 billion won from foreign investors. They will receive letters of commitment (LOC) from some of the investors in mid-December and from the rest in early January next year.

SK On has been able to attract investment despite deteriorating market conditions because it accepted investors’ demands and slashed its enterprise value to 22 trillion won, half its original level, analysts say. The company estimated its enterprise value at 40 trillion won at the beginning and over 30 trillion won after starting a comprehensive investment attraction process.

SK On will issue convertible preferred stocks (CPSs) for purchase by the Korea Investment Private Equity consortium and a fund established by MBK. Investors can expect additional gains from the IPO because, as preferred stockholders, they can receive dividends and then convert their shares into common stock. SK On’s stake is not diluted and there is no need to pay dividends if it incurs a loss while the share price per share is fixed.

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