This article was posted on the ChosunBiz MoneyMove site at 9:22 a.m. on Aug. 11, 2025.
SK Innovation, the intermediate holding company of the energy and chemical division of SK Group, will issue additional corporate bonds worth up to 600 billion won. This follows an additional fundraising of 5 trillion won during the process of merging its subsidiaries SK Enmove and SK On.
According to investment banking (IB) industry sources on the 11th, SK Innovation plans to issue corporate bonds worth 300 billion won on the 4th of next month after a demand forecast on the 27th. If significant funds are attracted during the demand forecast, SK Innovation plans to issue corporate bonds up to 600 billion won.
SK Innovation's credit rating is 'AA (Stable)', and the issuance of corporate bonds is expected to proceed smoothly. The maturity of the bonds to be issued has not yet been determined. An IB industry official noted that it is for 'the purpose of repaying borrowing funds' and said, 'Sufficient demand for the corporate bonds is expected, as it is an SK affiliate.'
Recently, SK Innovation secured 5 trillion won in capital, including from its subsidiaries. SK Innovation raised 2.7 trillion won, its battery subsidiary SK On obtained 2 trillion won, and SK IE Technology raised 300 billion won. The methods included third-party allocated paid-in capital increases and perpetual bond issuance. For the 2.3 trillion won to be raised by SK On and SK IE Technology, SK Innovation agreed to effectively provide 'payment guarantees' through a price-to-earnings swap (PRS) contract.
This capital raise aims to enhance financial stability while replacing financial investors (FIs) for its affiliates to escape the pressure of an initial public offering (IPO). Both SK On and SK Enmove promised to go public within a certain period to return the investment funds during the process of raising large-scale capital, but this did not materialize. SK On faced poor performance due to declining electric vehicle demand, and SK Enmove encountered issues related to duplicate listings.
SK Innovation attempted to merge the two companies in a situation where the subsidiaries' listings became uncertain, but was blocked by the FIs. It succeeded in merging the two companies along with replacing the FIs. MBK Partners and Korea Investment Private Equity, which were FIs for SK On, invested 2.8 trillion won in SK On from 2022 to 2023 and recovered 3.5881 trillion won. IMM Credit Solutions, which purchased a 40% stake in SK Enmove for 1.1 trillion won in 2021, also recovered approximately 1.6 trillion won through two rounds of equity sales and dividends.
SK Innovation plans to raise an additional 3 trillion won by the end of this year. It also aims to reduce its borrowing fund by more than 1.5 trillion won through the sale and liquidity of non-core assets. It is expected to secure more than 500 billion won if the ongoing 50% stake sale of the Boryung LNG terminal proceeds.
While this capital raise has increased SK Innovation's financial stability, ultimately, the performance of its battery business will be the key. In a report published by Korea Credit Rating on the 31st of last month, it said, 'While this raise is positive for securing financial stability, volatility associated with the performance of the battery sector is expected to persist,' adding that 'ultimately, the profitability of the battery sector needs to improve.'