SK Innovation has received approval from its boards and those of its affiliates, SK On and SK Enmove, to merge SK On with SK Enmove. Under the plan, SK On, the company’s electric vehicle (EV) battery unit, will absorb SK Enmove, which specializes in base oils, lubricants, immersion cooling and EV air-conditioning refrigerants. The newly combined entity is scheduled to begin operations on November 1.
Alongside the merger, SK Innovation and SK On have approved a major capital-raising initiative designed to fortify their balance sheets. SK Innovation intends to secure KRW 8 trillion in fresh capital by the end of the year, including KRW 2 trillion via third-party allotment, KRW 700 billion from perpetual bond issuance, and additional contributions of KRW 2 trillion and KRW 300 billion from SK On and SK IE Technology, respectively. The company also plans a further KRW 3 trillion capital increase by year-end. SK Inc. has committed to invest KRW 400 billion directly and to cover KRW 1.6 trillion through price return swap agreements with financial institutions. Similar PRS agreements will support SK On’s KRW 2 trillion and SK IE Technology’s KRW 300 billion increases.
To streamline its portfolio, SK Innovation will acquire all convertible preferred shares of SK On held by financial investors for KRW 3.588 trillion and has already purchased financial-investor–owned shares in SK Enmove. Concurrently, the company plans to divest non-core assets worth KRW 1.5 trillion this year, targeting a net-debt reduction of more than KRW 9.5 trillion by year-end.
SK Innovation projects that the merger will immediately strengthen SK On’s financial profile, adding KRW 1.7 trillion in equity and boosting EBITDA by KRW 800 billion this year, with incremental synergies of over KRW 200 billion by 2030. The group has set strategic targets of KRW 20 trillion in EBITDA and net debt under KRW 20 trillion by 2030. SK On aims to achieve more than KRW 10 trillion in EBITDA and a debt ratio below 100% over the same period.
Executive President Jang Yong-ho said the dual-track business and financial rebalancing will strengthen competitiveness and secure top-tier financial stability. SK On CEO Lee Seok-hee added that combining both companies’ technological and commercial capabilities will enhance their global market position.
Source: SKinno News
