SEOUL :SK Innovation Co Ltd said on Thursday its shareholders had approved the company's proposal to separate its battery business into a new company.
The decision paves the way for the battery business, a supplier for Ford Motor Co, Hyundai Motor Co and others to potentially raise funds and go public to finance its high-cost production capacity expansion.
The unit, to be launched on Oct. 1, will initially be a wholly-owned subsidiary of SK Innovation, tentatively named "SK Battery Co Ltd."
More than 80per cent of SK Innovation shareholders voted in favour of the plan, SK Innovation said in a statement.
"It's crucial to secure timely financial resources for further quantitative and qualitative expansions in the future," SK Innovation CEO Kim Jun told shareholders.
"With the split-off of the battery business, we plan to evaluate various ways to secure resources, such as establishing joint ventures, partnerships and attracting strategic and financial investors."
Kim played down speculation the battery unit could go public as early as next year. He said the business, which is aiming to turn profitable in 2022, expects its financial performance to improve as its U.S. factories start operations.
In July, Kim said he would review whether to list only on Nasdaq or opt for a dual listing in the United States and South Korea.
The South Korean battery maker said it had more than 1 terawatt hours (TWh) worth of batteries, which could power about 14 million electric vehicles.
South Korea's National Pension Service, SK Innovation's No.2 shareholder with an 8.05per cent stake, on Tuesday voted against the split-off plan, citing concerns about damage to shareholder value.
Shares of SK Innovation were trading down 3.6per cent versus a 0.7per cent fall in the benchmark KOSPI as of 0251 GMT.
(Reporting by Heekyong Yang and Joyce Lee; Editing by Stephen Coates and Richard Pullin)