BlueOvalSK, the US joint venture between SK On and Ford Motor Company for battery production, has announced its second share repurchase in as many months.

SK Innovation, the parent company of SK On, disclosed on [date] that BlueOvalSK will be conducting a share repurchase worth $3.4 billion. This follows a previous repurchase of $2.8 billion in [month]. SK Innovation attributed the move to "redeploying capital for improved efficiency of overseas investment."

A share repurchase involves reducing a company's capital and returning the investment to shareholders. With this latest repurchase, both SK Battery America (SK On's US subsidiary) and Ford will recover approximately $2.45 billion each. Combined with the first repurchase, the total value of shares repurchased by BlueOvalSK amounts to approximately $9 billion. After the first and second repurchases, BlueOvalSK's capital will decrease from approximately $16 billion to $7 billion.

The decision to repurchase shares is believed to be linked to the recent approval of a loan of up to $9.6 billion from the US Department of Energy (DOE) to BlueOvalSK. This financial support was provided under the DOE's Advanced Technology Vehicles Manufacturing (ATVM) program and carries an interest rate similar to US Treasury bonds. Established in 2007 under the Energy Independence and Security Act, the ATVM program offers low-interest loans for the manufacturing of automobiles and related components.

According to SK Innovation, this repurchase will likely reduce the interest burden that SK On will have to bear in the long term.