POSCO Future M announced a ₩1.1 trillion (US$771 million) rights offering to bolster its financial position amid an ongoing demand slowdown in the electric vehicle sector. The POSCO Group’s battery materials unit plans to issue 11.48 million new shares through shareholder allotment and public offering of unsubscribed shares.
The company joins other Korean firms making similar moves this year. Samsung SDI recently cut its planned capital raise to ₩1.7 trillion from ₩2 trillion, while defense contractor Hanwha Aerospace reduced its offering to ₩2.3 trillion from ₩3.6 trillion after regulatory scrutiny.
POSCO Future M will allocate ₩353.4 billion to its Canadian joint venture with General Motors, Ultium CAM, which will produce high-nickel cathode materials with an annual capacity of 33,000 tons. An additional ₩277.3 billion will fund a domestic spherical graphite production subsidiary. The company will spend ₩181 billion to expand domestic cathode material capacity and ₩288.4 billion as working capital for raw materials.
POSCO Holdings, which owns a 59.7% stake, has committed to acquiring its full allocation for ₩525.6 billion. The parent company will also invest in POSCO’s lithium hydroxide and battery recycling operations.
Market reception remains uncertain as the 14.82% increase in shares will dilute existing investor value. POSCO Future M’s stock dropped 2.52% in regular trading on announcement day and plunged over 8% in after-hours trading, highlighting investor anxiety about large-scale capital raises in the battery sector.
