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LG Chem spinning off battery business

LG Chem plans to spin-off its global battery business. LG Chem will seek approval from an extraordinary meeting of stockholders on 30 October and officially launch the spin-off—tentatively named LG Energy Solution—as a new corporation exclusively in charge of the battery business from 1 December.

This will be a physical division in which LG Chem will possess all of the stocks issued by the new battery corporation and LG Chem will possess 100% of the non-listed shares of the new corporation.

LG Chem plans to foster the new corporation to achieve sales of more than 30 trillion KRW (US$25.6 billion) in 2024 and become the world’s best energy solutions company based on batteries. The expected revenue of the new corporation is around 13 trillion KRW (US$11 billion) this year.

LG Chem is not planning an initial public offering of the new corporation, although it will review that in the future. Cash generated from business activities will be used as the facility investment funds according to the increase of EV demand, the company said.

LG Chem judged that this is the optimal point in time to reevaluate the corporate value and maximize stockholder value considering the performance of the battery business and the market situation. LG Chem created the foundation for structural profits in the EV battery business and posted its highest operating profit in the battery business.

LG Chem has currently procured more than 150 trillion KRW (US$128 billion) in orders on hand in the EV battery business and it is investing more than 3 trillion KRW (US$2.6 billion) annually in facilities.

LG Chem said the spin-off will make it possible to attract large investments, while easing financial burdens by establishing an independent financial structure system.

Another reason for this division is the need for prompt decision-making to respond to the rapidly changing market, as well as the rising need for flexible organizational operation, LG Chem added.

LG Chem plans to foster the new corporation to become the world’s best energy solutions company for not only battery materials, cells, pack manufacturing and sales, but also to have distinguished competitiveness in the E-platform sector that offers various services throughout the lifetime of batteries such as battery care/lease/charging/reuse.

Comments

Lad

Great news! As we know, batteries are an important key to a clean energy future.

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