(Yicai) May 28 -- South Korean energy giant SK Innovation will sell its loss-making lithium battery separator assets in China to Yunnan Energy New Material, better known as Semcorp, for CNY400 million (USD59 million).

Semcorp will acquire a 100 percent stake in SK Hi-Tech Materials from SK Innovation's electric vehicle battery subsidiary SK IE Technology, the Chinese lithium battery separator giant announced late yesterday. The final price will be adjusted based on the balance sheet of the target asset on the closing date of the deal.

SK High-Tech Materials operates SKIET's lithium battery separator plant in Changzhou, China's eastern Jiangsu province, with an annual production capacity of around 940 million square meters. It has eight base film production lines and 10 coating production lines for active material application. SK Innovation and its affiliates are the plant’s main customers.

The acquisition will help the company rapidly expand its existing production capacity, slash the time required for self-built capacity expansion, reduce capital and time costs for capacity projects, take on more separator orders, and meet demand from downstream clients, Semcorp noted.

SK High-Tech Materials has been in the red for the past two years. It posted net losses of CNY388 million in 2024 and CNY438 million in 2025, with revenues of CNY477 million and CNY454 million, respectively. Its net assets totaled CNY1.9 billion (USD280.1) at the end of last year.

The target asset is equipped with sound production equipment, but weak market expansion and excessive customer concentration have long kept its operating rate at a low level, pushing up its production cost per unit and resulting in sustained losses, Semcorp explained.

Once the deal is closed, Semcorp will leverage its established customer network, scale advantages, cost control capabilities, and core research and development technologies to address the root causes of SK High-Tech Materials' prolonged losses, thus revitalizing it and unlocking its production potential, the firm added.

Driven by robust demand, Semcorp announced on May 13 that it would invest CNY4 billion in a joint venture separator factory in Zigong, China’s southwestern Sichuan province, with an annual capacity of five billion sqm. On May 22, the company said it scrapped its CNY2 billion separator plant in Malaysia in a broader investment rethink driven by policy, market, and business changes.

Semcorp's shares [SHE: 002812] closed 0.3 percent down at CNY71.81 (USD10.58) today, after earlier gaining as much as 3.3 percent. The Shenzhen Component Index rose 0.8 percent.

This divestment is part of SKIET’s ongoing restructuring of its lithium battery and raw material businesses. The company also plans to shut down its South Korean plant by the end of the year and consolidate all lithium battery separator production at its facilities in Poland, The Asia Business Daily reported yesterday.

Editor: Futura Costaglione