South Korean steelmaker POSCO raised USD1.3bn by issuing convertible green bonds with a five-year maturity and zero-coupon rate on August 13, according to The Korea Economic Daily reported on August 15. This was the largest convertible bond released by South Korean companies, with JPMorgan , BNP Paribas , and HSBC as the joint bookrunners. The holders could change the bonds into the company’s shares at USD408 each during the period from this October to August 2026, for which POSCO took out 3.4% of its outstanding shares, or 2.9m shares. The steelmaker will use the raised funds for the expansion of its rechargeable battery materials and hydrogen businesses.

POSCO is dedicated to switching from a traditional steelmaker to a battery material supplier for electric vehicles (EV), as its long-term goal is to become a globally leading company of EV battery materials by 2030. Last December, the South Korean firm announced its plan of establishing a battery materials supply chain from raw materials procurement to final production. Furthermore, POSCO listed specific targets in materials production by 2030. Specifically, its subsidiary POSCO Chemical aimed to produce 220,000 tons of lithium and 100,000 tons of nickel, occupying a 20% global market share, as well as 400,000 tons of cathode materials and 260,000 tons of anodes for EV batteries.

To take closer to its goal, POSCO bought a salt flat in Argentina in 2018 for lithium resources, which is estimated to contain 13m tons of lithium and could be used for 370m EVs, according to the company. In January this year, POSCO Chemical raised USD1.13bn for the construction of its EU and US factories in 2022, as the firm scheduled to set up cathode materials plants in China, the EU, and the US to ensure an annual capacity of 110,000 tons. Later, this July, POSCO Chemical released its plan of a USD523m project next year to build a cathode materials plant with an annual capacity of 60,000 tons in Pohang city of South Korea. In the same month, POSCO also announced that it invested USD200m in building a nickel sulfate refining facility with an annual capacity of 20,000 tons.

Sources:

https://www.kedglobal.com/newsView/ked202108150003?lang=us

https://www.kedglobal.com/newsView/ked202012030011?lang=

https://www.kedglobal.com/newsView/ked202107280013?lang=us

https://www.kedglobal.com/newsView/ked202107080014?lang=us