SEOUL, May 15 (Reuters) - South Korea's SK Innovation

is considering selling its subsidiary SK IE

Technology (SKIET) to restructure its battery

business, the Maeil Business newspaper reported on Wednesday.

The move is aimed at easing financial difficulty faced by SK

Innovation's battery-making unit SK On amid weakening demand for

electric vehicles, according to the newspaper, citing an unnamed

investment banking source.

SKIET supplies separators - an essential battery

component - to EV battery makers including Tesla

partner Panasonic Corp.

The report added that SK Group has recently decided on a

plan to sell SKIET's management rights and began contacting

potential buyers through major global investment banks.

SK Innovation owns a stake of 61.2% in SKIET, whose market

value stood at 4.09 trillion won ($3.01 billion) as of Tuesday.

An SK Innovation official said nothing has been decided, in

response to Reuters' request for comment.

SK On, whose clients include Ford Motor ( F ), Volkswagen

and Hyundai Motor ( HYMTF ), widened its operating

loss to 332 billion won in the first quarter from 18.6 billion

won a quarter before as EV battery shipments fell. However, it

maintained its target to break even in the second half.

($1 = 1,358.8300 won)