(Yicai Global) Dec. 9 -- SK Innovation, South Korea’s biggest oil refiner, will spend CNY2 billion (USD310 million) in a debt-to-equity swap to gain a 49 percent stake in a unit of Chinese battery maker EVE Energy.

Conglomerate SK Group's unit, which is turning its focus on new energy vehicle batteries, will take over all of the loan claims of EVE United Energy to become its strategic investor, the Huizhou-based firm said in a statement yesterday. The parent will keep a 51 percent stake.

The deal should majorly ease EVE United's debt burden as it has borrowed CNY2 billion from Blue Dragon Energy since September 2018. 

The pair has cooperated before. In September 2019, EVE Energy said that the company plans to invest USD525 million to build a 50:50 joint venture plant with SK Innovation to further its NEV battery development. The factory should have an annual capacity of 20 to 25 gigawatt-hours.

Along with Samsung SDI and LG Chem, Seoul-based SK Innovation has grown to become one of South Korea's biggest NEV battery makers. In the first nine months of this year, its total capacity was 4.6 GWh, ranking fifth globally, according to South Korea's SNE Research.

The Chinese firm has suffered from the ripple effects of the Covid-19 pandemic. In the first three quarters of this year, EVE Energy’s net profit slid 18 percent to CNY946 million (USD144.5 million) from a year ago, according to its earnings report. Its revenue rose by 17 percent to CNY5.3 billion.

EVE Energy’s [SHE:300014] stock price was unchanged by noon after closing 4.32 percent up at CNY66.46 (USD10.20) yesterday.

Editor: Emmi Laine