Korea's IMM to invest $23 mn in battery parts supplier Choil Aluminum

The investor will be able to convert the bonds to Choil's new shares at $2.3 apiece, under the agreement

Choil Aluminum headquarters in Gyeongsan, North Gyeongsang Province (Courtesy of Choil)

Jong-Kwan Park 1

2023-07-21 17:31:51 pjk@hankyung.com

Batteries

South Korean private credit firm IMM Credit & Solutions Inc. will invest 30 billion won ($23.4 million) in Choil Aluminum Co., an EV battery components supplier listed on the country's major bourse Kospi, banking sources said on Thursday.

IMM Credit, wholly owned by Korea’s leading private capital manager IMM Holdings Inc., will invest in Choil Aluminum’s bonds with a warrant. The warrant will allow the holder to convert bonds to new shares in the aluminum products manufacturer at a predetermined exercise price.

Under the agreement, the credit manager can convert the bonds to stocks at 2,980 won apiece starting on August 10, 2024. Maturity is on August 10, 2029. The bond has no coupon rate and no yield to maturity, sources said.

Choil Aluminum’s share price jumped 11.76% on July 21 to close at 3,230 won.

IMM Credit will make the investment through the KBE fund, which the credit firm closed at 530 billion won in 2021 with a focus on battery and environmental, social and governance sectors.

Korea’s leading petrochemical firm LG Chem Ltd. is an anchor investor with a 150 billion won injection in the fund, with participation from the Korean Federation of Community Credit Cooperatives, state-run Korea Asset Management Corp., Shinhan Bank, Credit Union and Heungkuk Life Insurance Co.

IMM Credit has reportedly used the KBE fund to inject 100 billion won in EV battery parts maker L&F Corp., 80 billion won in anode components supplier Daejoo Electronic Materials Co. and 40 billion won in renewable power plants operator Daemyoung Energy Co.

The credit manager plans to invest another 100 billion to 120 billion won via the fund by year's end and form KBE II in 2024, sources said.

Choil Aluminum manufactures aluminum coils and sheets for batteries, cars, electronics and construction materials.

The company signed a contract last year to supply aluminum strips worth 1.04 trillion won to Lotte Aluminum Co., an aluminum and packaging materials affiliate of Korean conglomerate Lotte Group.

Write to Jong-Kwan Park at pjk@hankyung.com
Jihyun Kim edited this article.