SAMSUNG SDI Plans IPO to Raise $1.38 Billion

SAMSUNG SDI on Friday announced in a bourse filing that it will commence a rights offering to raise an estimated capital of $1.38 billion for its future competitiveness and mid- to long-term growth.

The company said that its Board of Directors resolved on the rights offering to secure funds for new facility investments. The rights offering will proceed with unsubscribed shares available for public subion (Initial Public Offering). The number of new shares to be issued is 11,821,000 shares, representing a 16.8% increase.

The record date for new share allocation is set for April 18, and the final issue price will be determined on May 22. The IPO process will take place from May 27 to June 3, starting with the employee stock ownership association, existing shareholders, and then the general public. The new shares are expected to be listed on June 19.

SAMSUNG SDI plans to use the funds secured via the rights offering to invest in the joint venture with General Motors in the US, expand the capacity of its battery plant in Hungary and build lines for all solid-state batteries in Korea.

The company has decided on the latest rights offering by taking into account it takes two to three years from new facility investments to mass production amid growing prospects for mid- and long-term growth of the battery market.

Original Equipment Manufacturers (OEMs) around the world remain committed to their electrification strategies in the mid- and long-run, despite concerns about lower demand for batteries due to the slowing growth of the electric vehicle market.

Market researchers maintain their forecasts that the global battery market would grow 20 percent on average each year from 2025 to 2030.

New Investments

Considering the continuing growth perspectives, SAMSUNG SDI plans to make new investments to expand the Hungary facilities and develop and mass produce novel technologies including all solid-state and LFP batteries in addition to the existing plans.

The company’s annual capital expenditures nearly quadrupled from $1.2 billion in 2019 to $4.5 billion in 2024. The figure is expected to decline slightly this year through adjustments of investment plans, considering the temporarily slowing demand. However, the company is committed to continuing investments for future technologies and production capabilities.

SAMSUNG SDI has made the decision on the rights offering in a pre-emptive manner to secure financial resources for long-term investments and achieve a stable financial structure for an enhanced market leadership at the time of demand recovery in accordance with its mid- and long-term strategies.

Also, the company plans to seek and consider diverse measures to secure funds from its assets.

Joo Sun Choi, CEO and President of SAMSUNG SDI, said that the company has decided to go forward with a rights issue to accelerate our mid- to long-term growth with a stable financial structure.

“We will overcome the current market slowdown by strengthening our technological competitiveness, expanding sales and orders and innovating the cost structure, and prepare for the upcoming supercycle,” he said.