HONG KONG: The electric vehicle (EV) battery business of South Korea’s SK Innovation Co Ltd, SK On, has begun a new funding round, targeting 2 trillion to 3 trillion won ($1.6 billion to $2.4 billion), said two people with knowledge of the matter.

The fundraising will mainly target international investors, said the people.

One said there will also be domestic participation, and that the company aims to finalise the fundraising as early as the end of March.

SK On in December raised 2 trillion won from SK Innovation and 800 billion won from financial investors including Korea Investment Private Equity.

The business was valued at 22 trillion won in that funding round, said one of the people, who declined to be identified as the information is confidential.

A spokeswoman declined to comment on valuation but said SK On expects an additional 500 billion won from private equity funds this year as part of last year’s fundraising.

She said the amount and schedule for the latest fundraising have not been set. SK Innovation was not immediately available for comment.

The new call for funding represents a fresh effort to boost the EV battery business as its parent bets on accelerated electrification of cars. SK Innovation on Tuesday said it would focus spending on growing SK On this year even as the business was taking longer than it expected to turn a profit.

SK On accounted for 15% of group revenue in the fourth quarter, its parent said.

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The battery unit was losing money in 2022 with challenges such as a global chip shortage, raw material price hikes, rising labour costs, unfavourable exchange rates and delayed production increases at its factories in Hungary and the United States.

It expects to book a profit in 2024, its chief financial officer said on Tuesday.

SK On will eventually launch an initial public offering, as per an agreement with financial investors, SK Innovation said in November.