SK Innovation is making bold moves to rescue its struggling battery business, SK On. The company announced a major internal restructuring to boost profitability and cut its debt burden. As part of this plan, SK On will merge with SK Enmove, a lubricant-producing subsidiary, forming a new entity to streamline operations.
This strategic merger will unite battery production with lubricants, base oils, EV refrigerants, and cooling technologies. Together, these units will offer package deals and cross-product solutions to automotive clients. As a result, SK Innovation expects stronger client relationships and broader industry appeal.
The company believes this reorganization will drive synergies between the two units. The SK On battery business will now work alongside products that support electric vehicles and energy systems. Meanwhile, the lubricant technologies from SK Enmove will enhance cooling and performance solutions.
To support this transformation, SK Innovation unveiled a massive funding plan. The company aims to raise 8 trillion won this year. It will secure 2 trillion won through third-party allotment and issue 700 billion won in perpetual bonds. SK On will raise another 2 trillion won through rights offerings, while SK IE Technology plans to raise 300 billion won.
Additionally, SK Innovation will raise 3 trillion won from other sources by year-end. SK Inc., the holding company, will invest 400 billion won in SK Innovation’s capital increase. The remaining 1.6 trillion won will come through price return swaps arranged by securities firms.
Moreover, SK Innovation will reduce debt by over 1.5 trillion won by selling non-core assets. These moves aim to improve liquidity and financial health across the group. The company remains focused on improving EBITDA and bringing net borrowings below 20 trillion won by 2030.
Currently, the SK On battery business struggles to achieve profitability. It has recorded over 3 trillion won in operating losses since its spin-off. Net borrowings exceed 23 trillion won, representing 70 percent of SK Innovation’s total debt.
Through this reorganization, the firm expects to reverse these losses. The long-term vision includes stronger cash flow, better market positioning, and shareholder value growth. However, SK Innovation has no plans to take the new entity public. Instead, it will focus on restoring SK On’s financial performance.
Previously, the company merged with SK E&S and integrated other affiliates to streamline its operations. Now, with the SK On battery business as a priority, SK Innovation continues to reshape its future.
