(Photo= Provided by SK Innovation)

 

[Alpha Biz=(Chicago) Reporter Kim Jisun] Global credit rating agency S & P Global has downgraded the creditworthiness of SK Innovation and SK Geo Centric. Analysts say that the battery market is under heavy facility investment (CAPEX) burden amid a slowdown in demand for electric vehicle batteries.

S & P announced on the 19th that SK Innovation's credit rating will be lowered from 'BBB-' to 'BB +'. In November 2020, the credit rating dropped from 'BBB' to 'BBB-' and was downgraded to 'BB+', a speculative rating. The rating outlook has remained 'stable'.

"SK Inno's borrowing burden will be larger and longer than expected," S & P Global said. "Considering the recent slowdown in demand for electric vehicle batteries and larger-than-expected size of this year's facility investment, SK Inno's adjusted loan ratio to operating profit before amortization (EBITDA) is unlikely to improve to less than four times by the end of next year."

There is still great concern about increasing the financial burden. S & P said, "SK Innovation's financial risk has been adjusted from 'significant' to 'aggressive'."

S & P Global, a subsidiary of SK Innovation, also lowered its credit rating from 'BBB-' to 'BB+', reflecting SK Inno's creditworthiness.

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