SK Nexilis, a wholly-owned subsidiary of SKC, plans to raise up to 500 billion won ($445 million) to build a new plant in Malaysia as it prepares for rising demand for copper foil, a key component in the manufacturing of electric vehicle batteries.

The copper foil maker is working with several private equity firms to sound out institutional investors for the financing, industry sources said.

The deal will likely be structured as a pre-initial public offering (IPO) placement, where financial investors purchase new shares issued by the company with an option to exit the investment through an IPO within a defined timeline. Protections such as put options could also be provided to investors to minimize their losses in case the listing fails.

SK Nexilis, formerly known as KCFT, was acquired by SKC in 2020 for 1.2 trillion won. It plans to start construction of the 44,000-ton plant in the first half of this year, aiming to make it operational by 2023. The plant would boost the company’s copper foil production capacity to 100,000 tons per year, which would be a three-fold increase.

Access to a stable and cheap power supply is the main reason SK Nexilis chose Malaysia as its production hub, because the manufacturing of copper foil consumes a lot of power.

Demand for copper foil is expected to rise as the electric vehicles market grows rapidly. SK Nexilis will continue expanding its investments abroad, with the aim of increasing production capacity to five times the current level by 2025. (Reporting by Si-eun Park)