# SK On assumes $1.5 billion debt from US battery subsidiary
*The transaction transfers 2.028 trillion won in dollar bonds from SK Battery America to the Seoul parent, representing 14.05% of its consolidated equity as EV demand cools.*
**Published:** September 30, 2026
**By:** Seung-min Park
**Section:** Batteries & Electric Vehicles — South Korea
**Format:** Company Watch
**Confidence:** high
**Source:** https://eastasiabrief.com/batteries-ev/sk-assumes-1-5-billion-debt-us-battery-subsidiary-438
**Publisher:** East Asia Brief (https://eastasiabrief.com/)
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## What to know
- SK On assumes $1.5 billion in foreign-currency bonds from US unit SK Battery America
- The debt represents 14.05% of SK On's 2025 consolidated equity capital of 14.43 trillion won
- Bondholders will vote on the proposed issuer transfer at meetings in late October 2026
*Battery modules move along an automated conveyor line inside a battery manufacturing plant as technicians work in the background. (AI-generated image)*
SK On said Sept. 29 it will assume $1.5 billion in foreign-currency debt issued by its wholly owned United States manufacturing subsidiary, SK Battery America, to ease overseas financing costs.
The transaction covers 2.028 trillion won in debt at an applied foreign-exchange rate of 1,352 won per dollar. The obligation equals 14.05% of the battery maker's consolidated equity capital at the end of 2025.
SK Battery America operates a 22-gigawatt-hour cell manufacturing complex in Commerce, Georgia. The facility represents a $2.6 billion capital investment that produces high-nickel pouch cells for North American automotive manufacturers.
The board of directors approved the debt assumption on Sept. 28. SK Innovation filed the regulatory disclosure with South Korea's Financial Supervisory Service the following day.
The assumed debt comprises two tranches of foreign-currency notes sold in international bond markets. The first tranche is a $500 million senior issuance carrying a 4.875% coupon, sold in January 2024 and maturing on Jan. 23, 2027.
The second tranche consists of $1.0 billion in senior notes carrying a 4.250% coupon. SK Battery America issued the five-year notes in January 2026, with final maturity scheduled for Jan. 22, 2029.
Under the transaction terms, SK On assumes direct repayment obligations for principal and interest to foreign bondholders. SK Battery America will transfer its liabilities to the Seoul headquarters and exit the public debt contracts.
SK On will simultaneously account for an equivalent loan to SK Battery America on its balance sheet. The structure turns external market obligations into an intercompany loan without moving physical cash or drawing down credit lines.
The restructuring converts external market debt into intra-group borrowing, an SK On official said. The step reduces debt maintenance overhead for the Georgia operation.
South Korean battery producers have faced mounting capital-carrying costs across North America as sales growth for fully electric passenger vehicles slowed. High borrowing rates in United States markets have compounded the expense of servicing local plant debt.
SK Battery America has borne heavy financing overhead while running its two Commerce manufacturing plants below targeted utilization rates. Transferring the notes lets the group use SK On's broader domestic balance sheet to negotiate refinancing terms.
Automotive manufacturers Volkswagen and Ford Motor Company procure battery cells produced at the Georgia site. Ford also partners with SK On in BlueOval SK, a joint venture developing a separate 45-gigawatt-hour manufacturing hub in Tennessee.
SK On also holds a 50% stake in a $5 billion joint venture with Hyundai Motor Group in Bartow County, Georgia. That facility is designed to manufacture 35 gigawatt-hours of battery cells annually for regional electric vehicle assembly lines.
To cushion the demand slowdown in passenger vehicles, SK Battery America has begun repurposing portions of its 22-gigawatt-hour Georgia lines. The converted capacity will produce lithium iron phosphate cells for utility-scale energy storage systems.
The subsidiary signed a supply framework with Flatiron Energy Development to supply up to 7.2 gigawatt-hours of energy storage system batteries through 2030. Commercial shipments under the agreement are scheduled to begin in late 2026.
The strategic pivot to stationary energy storage addresses factory underutilization while preserving eligibility for advanced manufacturing tax credits under the United States Inflation Reduction Act. Storage systems offer more predictable off-take volumes during vehicle demand plateaus.
Parent company SK Innovation has executed wider organizational reorganizations to bolster financial stability across its battery operations. The energy group merged trading and industrial units earlier to funnel liquidity toward SK On's global factory network.
SK On's planned United States manufacturing footprint spans over 100 gigawatt-hours across wholly owned sites and automotive partnerships. Sustaining that pipeline requires substantial capital maintenance as original equipment manufacturers review vehicle launch cadences.
Rivals LG Energy Solution and Samsung SDI have similarly adjusted North American capital expenditures. Both South Korean peers have slowed capacity additions and reassigned selective production lines toward grid storage applications to manage balance-sheet strain.
The absorption moves credit exposure directly onto SK On's corporate balance sheet in Seoul. While the step increases the parent company's reported liabilities, it eliminates refinancing volatility and credit premia for the American production unit.
Bondholders across both overseas note series will vote on the proposed issuer transfer at formal meetings scheduled for late October 2026. The debt assumption will take legal effect only after bondholders approve the change of issuer for each respective series, the company said.
The regulatory filing does not state the specific calendar dates for the late October bondholder meetings. SK On said it will publish a corrective disclosure if creditors reject the substitution.
SK On recorded 14.43 trillion won in consolidated equity capital at the close of 2025. That capital base leaves the assumed foreign-currency debt within the parent company's internal risk management limits.
## Impact map
| Event | Korea | China | Japan | Global impact |
| --- | --- | --- | --- | --- |
| SKBA debt transfer | SK On absorbs 2.028 trillion won in overseas bonds, equal to 14.05% of 2025 equity | Chinese ESS makers face tighter competition as SK On converts Georgia lines to LFP cells | Equipment vendors maintain line maintenance orders as Georgia shifts lines to ESS | Automakers Ford and Volkswagen retain cell supply while SKBA reduces debt servicing pressure |
| SKBA debt transfer | SK On absorbs 2.028 trillion won in overseas bonds, equal to 14.05% of 2025 equity | Chinese ESS makers face tighter competition as SK On converts Georgia lines to LFP cells | Equipment vendors maintain line maintenance orders as Georgia shifts lines to ESS | Automakers Ford and Volkswagen retain cell supply while SKBA reduces debt servicing pressure |
## In this story
- **Companies:** SK On, SK Battery America
- **Tickers:** 096770.KS
- **Exposed:** SK Innovation, Ford Motor Company, Hyundai Motor Group
- **Policy:** Subsidies, Economic Security
- **Impact:** Cost Structure, Capex, Compliance
## Primary sources
1. fss.or.kr
2. einfomax.co.kr
3. zdnet.co.kr
4. sbs.co.kr
5. mk.co.kr
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Cite as: East Asia Brief, "SK On assumes $1.5 billion debt from US battery subsidiary," September 30, 2026. https://eastasiabrief.com/batteries-ev/sk-assumes-1-5-billion-debt-us-battery-subsidiary-438