SK Nexilis, a subsidiary of SKC, is seeking to attract an investment of 1 trillion won (approximately $740 million) to expand its production facilities in Europe. This move is crucial as the company faces financial difficulties and aims to solidify its leadership in the global copper foil market.
On July 24, investment banking sources revealed that SK Nexilis is in discussions with private equity firms to gauge their interest in purchasing around 1 trillion won worth of newly issued shares. SKC, which acquired SK Nexilis in 2020, seeks a corporate valuation exceeding 3 trillion won for the subsidiary, integral to its secondary battery value chain.
SK Nexilis has achieved notable advancements in the copper foil industry, being the first to mass-produce 4 μm thick copper foil in 2019. The company also produces 6 μm thick copper foil for electric vehicles at lengths of up to 77 kilometers. These innovations have secured SK Nexilis a 22% market share by the end of 2022.
However, financial challenges have mounted, with borrowings increasing from 200 billion won in 2020 to 1.1286 trillion won by the end of last year. The company reported first-quarter sales of 91.6 billion won, a 49% decline from the previous year, and an operating loss of 39.9 billion won. Consequently, domestic credit rating agencies have downgraded SKC’s outlook from ‘stable’ to ‘negative.’
A company representative cited poor performance and increased debt as reasons for seeking external investment. Despite these issues, SK Nexilis continues to expand, with recent developments including the launch of commercial production at its Malaysian plant and the planned completion of a 57,000-ton copper foil plant in Poland this year. By 2024, the company aims to achieve an annual production capacity of 250,000 tons across South Korea, Malaysia, Europe, and North America.
In a bid to streamline operations, SK Nexilis conducted its first voluntary retirement program last month. Industry observers are closely watching for potential restructuring announcements at SK Group’s upcoming management strategy meeting.
The Malaysian plant is anticipated to become profitable in the fourth quarter, offering some optimism for financial recovery. The pursuit of a 1 trillion won investment is viewed as a pivotal effort to ensure the company’s stability and competitive edge in the global copper foil market.
