Restructuring Cuts Borrowing About 5.4 Trillion Won and Saves Around $180 Million Annually in Interest
A view of SK On’s Tennessee plant in the United States. (Provided by SK On)
SK On has completed the restructuring of BlueOval SK, its battery joint venture with Ford, and converted its Tennessee plant in the United States into a sole corporate entity.
The move is expected to strengthen its financial structure by winding down the joint venture arrangement while also increasing autonomy in operating its U.S. production base.
SK On said on May 21 that it had converted the existing BlueOval SK Tennessee plant into SK On Tennessee and entered a sole-operation system.
Under the restructuring, SK On will solely own and operate the Tennessee plant. The two existing plants in Kentucky under BlueOval SK, meanwhile, will be owned and operated by Ford.
SK On expects the end of the joint venture structure to reduce its borrowing burden by about 5.4 trillion won ($3.97 billion). Given the high interest rate environment, the company expects to save about $180 million (about 270.0 billion won) annually in interest expenses. It also expects a reduction in annual depreciation expenses of about 330.0 billion won related to the Kentucky plants.
An SK On official said, “Through this restructuring of the joint venture system, we have strengthened our financial structure and improved the efficiency of production operations in the United States,” adding, “Based on the newly secured sole production base, we will actively respond to changes in the North American market.”
Jung Min-hee
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