SK On to assume 2 trillion won in overseas debt of US subsidiary

SK On has decided to assume the overseas debt obligations of its US subsidiary, SK Battery America. The transaction involves the assumption of principal and interest payments on 1.5 billion dollars in foreign bonds issued by the subsidiary. ZDNet Korea reported the story. The debt consists of two tranches: 500 million dollars maturing in January 2027 and 1 billion dollars maturing in January 2029. The total amount represents 14.05 percent of SK On's equity as of the end of the previous year.

The assumption is conditional on bondholders agreeing to the change of issuer at a meeting scheduled for the end of next month. Upon completion, SK On will directly take over the repayment obligations previously held by SK Battery America. SK On will account for the 1.5 billion dollars as a loan to the subsidiary, converting the external debt into an internal loan.

No new cash payment of 1.5 billion dollars will be made to the subsidiary during this transaction. The move aims to reduce the subsidiary's external financial burden by shifting its creditors from outside investors to the parent company.