LG Chem gets permission to spin off battery business and plans to go public within one year

According to reports, LG Chem (LGChem) shareholders voted today to approve the company's plan to spin off the battery business. This move paved the way for an IPO (initial public offering) of the new company after the spin-off. LG Chem said last month that it plans to divest its electric vehicle battery business due to the rapid development of the electric vehicle market. Today, the company’s shareholders voted to approve the plan. The business will be officially split on December 1, and the new division after the split will be initially named 'LG Energy Solutions Company' (LG Energy Solutions), initially a wholly-owned subsidiary of LG Chem. But in about a year or so, LG Energy Solutions plans to take up to 30% of the shares for an IPO. Currently, LG Chem is the world's largest battery manufacturer, supplying electric vehicle batteries for Tesla and General Motors. Panasonic and Ningde Times Division ranked second and third. LG Chem CEO Hak Cheol Shin said at a shareholder meeting held in Seoul today: 'The battery business is expected to rise rapidly. The competition in this market is fierce, not only from other battery manufacturers, but also from car manufacturers. For this reason, we decided Spin off the battery business in order to better optimize our management in today's rapidly changing market environment.” According to people familiar with the matter, more than 82% of LG Chemical shareholders who attended the shareholder meeting today voted in favor of the plan. LG Chem’s CFOChaEast-seok said: “With the separation of the battery business, we can use various financing options to expand investment at an appropriate time. Based on this, we can further consolidate the world’s number one by widening the gap with competitors. The throne.” ChaEast-seok also added that due to the substantial increase in production investment, the company’s debt has risen, which limits the company’s growth. When asked about selling shares to strategic investors before the IPO, Xin Xuezhe said that the company is evaluating various options. Investment research firm NH Investment u0026 Securities analyst Hwang Yu-sik said that as an independent company, the battery business will be able to better raise funds, including through IPO to expand production. Regarding the spin-off plan, LG Chemical’s second-largest shareholder 'Korea National Pension Fund' (NPS) voted against it, but failed to change the final voting result. Disclaimer: Some pictures and content of the articles published on this site are from the Internet. If there is any infringement, please contact to delete. Previous: Volkswagen and chip manufacturer NXP cooperate to develop battery management system for MEB platform EV