LG Energy Solution (LGES), the world’s top-tier battery manufacturer, plans to list its shares on the domestic stock exchange in the fourth quarter of this year to raise as much as $8 billion, a source familiar with the issue told The Korea Times, Monday.
“LGES plans to push for an initial public offering (IPO) in the fourth quarter of this year at the earliest. It internally aims to raise up to 9 trillion won from the IPO. LGES is in talks with the Korea Exchange (KRX) to specify necessary procedures for the listing,” the source said.
LGES has chosen KB Securities and Morgan Stanley as the primary underwriters for the process, according to another industry official. Regarding the specifics of its planned local IPO, LGES said the company isn’t in a position to comment on the matter.
Market analysts said the size of LGES’s planned IPO could reach as high as $8 billion, which would be the largest ever in Korea. SK Innovation (SKI), SK’s battery unit which trails Samsung SDI and LGES in the market, sought $2 billion earlier by separating off its affiliate SK IE Technology (SKIET).
“The KRX is on track to review IPO requests submitted by LGES and I believe there will be no issues for LGES to receive approval to do so by the bourse operator,” said the official.
LGES was spun off from its parent LG Chem last year. At the time of the separation, LGES said the spin-off was mostly aimed at expanding its profile in the rapidly growing and highly lucrative battery market.
LGES, a top battery supplier of General Motors and Tesla, has been asked by the U.S. government to expand its production capacity in line with the Biden administration’s vigorous efforts to embrace “green initiatives.” At the very last minute before the deadline for President Joe Biden’s final review of LGES’s blockbuster intellectual property dispute with SKI, LGES accepted the USTR’s request to completely settle the case, allowing SKI to continue its battery business in the United States.
LGES saw its first-quarter operating profit reach 341 billion won on the back of supplying more batteries to Hyundai Motor, GM, Ford, Volkswagen and Audi as well as improved production yields and group-wide cost-cuts.
“Cash earned from the IPO will be used for the development of next-generation batteries, the hiring of experienced R&D personnel and the expansion of the battery business through various measures such as the establishment of more joint ventures,” the industry official said.
LGES, which operates a joint venture with GM, is very close to announcing its new battery joint venture with Indonesia Battery Corp. (IBC) in Indonesia, the amount of which is expected to be about $1.2 billion.
