EcoPro BM is set to raise 1.2 trillion won through a capital increase aimed at funding its second phase of investment in an Indonesian nickel refinery and the commencement of production at its Hungarian plant. This strategic decision comes amid a slowdown in electric vehicle demand, which has negatively impacted the battery materials market. The company aims to enhance its competitiveness in nickel-cobalt-manganese (NCM) cathodes by proactively investing in securing key minerals and expanding its production base in Europe.
According to industry sources, EcoPro BM's board of directors approved the issuance of 9,909,990 common shares through a rights offering with a general public subscription for any unsubscribed shares. The capital increase represents a 10.1% dilution, with a planned issuance price of 121,200 won, reflecting a 20% discount. The final issuance price will be confirmed on October 12.
Subscriptions for existing shareholders and employee stock ownership plans will take place from October 15 to 16, while the general public subscription is scheduled for October 20 to 21. The new shares are expected to be listed on November 5.
All proceeds from the 1.2 trillion won capital increase will be allocated to securing a stake in the BNSI refinery in Indonesia, investing in the Hungarian subsidiary, and enhancing domestic cathode production facilities. Specifically, 765 billion won will be directed toward acquiring shares in a special purpose vehicle (SPV) for the BNSI refinery, 150 billion won for operational funds and remaining investments for the Hungarian plant, 150 billion won for domestic cathode production facility investments, and 135 billion won for operational funds including raw material purchases.
The EcoPro Group plans to use this capital increase to secure funding for the second phase of investment in the Indonesian nickel refinery. EcoPro and EcoPro BM will hold a combined 39% stake in the BNSI refinery project in Sulawesi, Indonesia, becoming major shareholders. The remaining shares will be held by Indonesia's state-owned mining company PT Vale Indonesia, China’s GEM, and global funds.
The BNSI refinery is designed to produce 90,000 tons of nickel annually, enough to supply approximately 2 million electric vehicles. Based on its stake, EcoPro Group is expected to secure a long-term purchasing volume of around 35,000 tons per year. Previously, EcoPro secured about 29,000 tons of nickel through the first phase of the IMIP project in Indonesia. Once the BNSI investment is completed, the group's total nickel supply rights are expected to increase to approximately 65,000 tons.
Investment in the Hungarian plant is also a key reason for this capital increase. EcoPro BM anticipates that the European electric vehicle market will continue to grow until 2030 and plans to enhance its supply competitiveness for European cell manufacturers and automakers by securing local production capacity. The company aims to begin mass production at the Hungarian plant by June 2026 and has indicated the need for additional investment and operational funds.
However, the large-scale rights offering raises concerns about potential dilution of existing shareholder value. In response, the holding company EcoPro has decided to participate in the rights offering at 120% of the allocated amount. The company stated, "This decision reflects our confidence in the growth potential of the Indonesian mineral business and our commitment to responsible management."
EcoPro BM is prioritizing the capital increase over borrowing to reduce financial burdens while securing a foundation for mid- to long-term growth. Given the ongoing high-interest rate environment, relying on large-scale borrowing for investment could increase long-term financial burdens. Therefore, the company aims to stabilize its financial structure and enhance its business competitiveness through capital expansion.
CEO Choi Moon-ho stated, "This capital increase is a decisive step to secure a leading position in the global nickel market and enhance our NCM competitiveness. We aim to combine our high-nickel technology with cost competitiveness to take the lead in the global NCM battery market."
* This article has been translated by AI.
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