SG Private Equity (SG PE) will invest 55 billion won ($49 million) in auto parts maker Myoung Shin through its blind-pool fund, sources said on Tuesday (February 16).

The PE firm will acquire exchangeable bonds worth 25 billion won issued by MS Autotech, which will be exchanged with shares of Myoung Shin. MS Autotech is the largest shareholder of Myoung Shin with a 65.6% stake. SG PE will also acquire convertible bonds worth 30 billion won to be issued by Myoung Shin.

Korea Investment Private Equity (KI PE) also recently decided to invest 55 billion won in Myoung Shin. Myoung Shin plans to use the proceeds to accelerate its electric vehicle (EV) contract manufacturing business.

Founded in 1995, Myoung Shin supplies auto parts to Tesla, Hyundai Motor and Kia Motors from production bases in Gunsan and Asan, with Tesla accounting for 35% of total revenue. The Gunsan plant, acquired from GM Korea in June 2019, has a capacity of 250,000 to 270,000 units per year.

The company signed an agreement with Daechang Motors this year for contract manufacturing of 3000 EVs. It also signed a memorandum of understanding with Faraday Future for contract manufacturing in 2020.

Myoung Shin has proven competitiveness, with Faraday Future selecting the firm as its original equipment manufacturer. The MOU with Faraday Future reportedly played an important role in the raising of money from SG PE and KI PE.

Faraday Future was founded in 2014 and has become a global shared intelligent mobility ecosystem company with its headquarters in Los Angeles. The firm plans to list on the NASDAQ market via a merger with a special purpose acquisition company in the second quarter of this year in a deal valuing the combined entity at over $3 billion. It will launch the luxury electric car FF91 in the first quarter of 2022.

FF 91 will be produced in Faraday Future’s assembly plant at Hanford, California, which will focus on luxury electric cars as it has a capacity of 10,000 units per year. Other models will be produced by Myoung Shin from the second quarter of 2023.

“The automotive ecosystem is rapidly transforming into electric vehicles, and contract manufacturing is becoming more important as the number of electric car startups increases,” said an industry source.

“Myoung Shin is expected to rapidly grow its electric vehicle contract manufacturing business based on the external funds.” (Reporting by Se-hun Jo)