South Korean battery maker SK On Co. will raise a total of 2.8 trillion won ($2.17 billion) from its parent company and a few other local private equity funds by issuing new shares, in an effort to pool financial resources for business expansion.

SK On will sell 36.4 million shares, worth 2 trillion won, to SK Innovation Co. and 14.8 million shares, worth 824.3 billion won, to six local PEFs, including Korea Investment Private Equity, SK Innovation said in a regulatory filing.

The investment from the PEFs could increase by an additional 500 billion won, as the investors agreed to chip in a total of 1.3 trillion won in SK On, a decision that was also approved by the company board earlier.

SK Innovation will make the first 1 trillion won investment before the end of this month, with the remainder to be proceeded next year.

The funds will be used to help SK On, which was split off from SK Innovation in October last year, accelerate its push for an expansion in the global battery market amid the rapid electrification trend.

It had been widely speculated that SK On had been in talks with potential long-term financial investors, to secure investment funds for pre-initial public offering financing.

Among the investors SK On was said to have tapped were Carlyle Group Inc. and BlackRock Inc., but the talks reportedly fell through.

SK Innovation CEO Kim Jun said earlier this year the IPO was not likely to take place until after 2025.

SK On has remained in the red and is aiming for a turnaround by the fourth quarter of this year amid an aggressive overseas push.

The unit's operating loss narrowed to 134.6 billion won from 326.6 billion won, as selling prices went up due to higher raw material costs. Its sales reached 2.19 trillion won in sales in the third quarter, up 906.2 billion won from the previous quarter's 1.28 trillion won. (Yonhap)