Posco Chemical Co., an affiliate of South Korea's steel giant Posco Group, said Friday it has raised 1.3 trillion won ($1.1 billion) by new stock sales to fund its rechargeable battery material business.

Posco Chemical said it sold 16.47 million shares at 77,300 won to the company's employee stock ownership association and existing shareholders between Wednesday and Thursday, with its subscription rate at 103 percent.

The new shares will be listed on the Seoul bourse on Feb. 3, the firm said.

The company said it was able to raise more funds than its original target as investors positively evaluated its battery material business amid upbeat demand for electric vehicles (EVs).

The stock issuance is expected to cut its debt rate from 104 percent at end-September to 46 percent after the share listing, it noted.

Last month, Posco Chemical said it will provide cathodes, one part of lithium-ion batteries for EVs, to Ultium Cells -- a battery joint venture of American automaker General Motors Co. and South Korean chemical firm LG Energy Solution Ltd.

Posco has expanded investment in chemicals for rechargeable batteries, as the EV battery market has been on a roll, with automakers around the world racing to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions.

Currently, Posco Chemical has an annual cathode production capacity of 30,000 tons and 10,000 tons at its plants in the southern city of Gwangyang and the southeastern industrial city of Gumi, respectively. (Yonhap)