- The upcoming spin-off of two businesses will take place in the form of simple division and split-off, wherein SK Innovation will own the entire issued stocks of the new companies
- The spin-off decision was based on the necessity to enhance SK innovation’s corporate value
SK Innovation has decided to spin off the battery and exploration and production (E&P) business as independent companies, creating an autonomous management system for each. SK Innovation held the board of directors (BOD) meeting led by Chairman Kim Jong-hoon on the 3rd and decided to spin off its battery and E&P businesses, after announcing that these two businesses have been fully recognized for their growth potential and competitiveness.
The upcoming spin-off of two businesses will take place in the form of simple division and split-off, wherein SK Innovation will own the entire issued stocks of the new companies. The assets and liabilities belonging to the two businesses will be transferred to the newly established company, respectively.
The spin-off decision was based on the necessity to enhance SK innovation’s corporate value. Following this, the extraordinary general meeting will take place for approval of the matter on September 16th, and the new tentatively named companies “SK Battery Co., Ltd.” and “SK E&P Co., Ltd.” will officially come to existence starting October 1st. According to this decision, SK Innovation will be a holding company that plays the role of the “Green Portfolio Designer & Developer” and puts greater emphasis on the improvement of the enterprise value.
The company will center its focus on the green businesses and utilize various means such as R&D, business development, M&A, and others to discover the second and third battery and lithium-ion battery separator (LiBS) businesses and create new values. It is also planning to grow the BMR (Battery Metal Recycle) business, which is currently being promoted, in full swing.
The SK Battery Co., Ltd. (tentative name) will be responsible for the medium-to-large-sized EV batteries, Battery as a Service (BaaS), and Energy Storage System (ESS). The SK E&P Co., Ltd. (tentative name) will be in charge of oil exploration and production business, and the Carbon Capture & Storage (CCS) business.
Turning point for securing global competitiveness in the battery business
SK Innovation’s Chairman of the Board Kim Jong-hoon said, “The upcoming spin-off will allow the businesses to create a management system that fits their business characteristics, and the decision was made to raise the overall expertise and competitiveness.” “Attracting investment and increasing business value in each business will provide more flexibility to quickly and comprehensively respond to various management environments,” Chairman Kim added.
The company said that the spin-off will be a turning point for securing global competitiveness in the battery business. It was announced in SK Innovation’s Story Day event on July 1st that the battery business aims to grow into a global top player based on its battery order backlogs of “1 Terawatt + α.”
Currently, the company holds an annual battery production capacity of 40GWh, producing from various countries, including South Korea, the United States, China, Hungary. The company revealed its plan to quickly expand its production capacity to 85Gwh by 2023, 200Gwh by 2025, and 500Gwh by 2030.
The company will expand the battery application market to products such as Energy Storage System (ESS), flying cars, robots, and others, and also provide services such as the Battery as a Service (Baas) platform business, preparing to execute measures that will act as the new growth engines. The battery business will continues the Life Cycle Assessment (LCA) and improvement in order to complete its ESG management. Based on this, it has set the goal to join the RE100 by 2030 and achieve Carbon Net Zero by 2035.
Regarding the E&P business spin-off, SK Innovation revealed, “We made the decision to create a more detailed and specific strategy for our Green Transformation.”
Although oil and carbon emission go together, the company’s E&P business knows best about the oil industry – still the most important source of energy today. The plan is to ensure growth by innovating the business model to be more eco-friendly, wherein the carbon will not be emitted during the oil production stage, and the emitted carbon of the usage stage would be permanently captured and stored below the earth