LG Energy Solution plans to IPO in January

LG Energy Solution plans to complete its planned IPO in South Korea in January 2022. The battery maker expects to offer 42.5 million shares at a price of between 257,000 and 300,000 won each, according to a regulatory filing.

LGES spun off from LG Chem about a year ago and the battery maker’s IPO plans were reported in June. The regulatory filing now also indicates the planned size: one share costs the equivalent of 193 to 225 euros, which would result in a volume of 9.56 billion euros with the intended maximum reach.

Even at the lower end of the range, LGES would be South Korea’s largest IPO, surpassing Samsung Life Insurances, according to Reuters. The Samsung division raised €4.3 billion in its IPO in 2010. For LGES, the lower end of the bandwidth would correspond to a volume of 8.2 billion euros.

Of the 42.5 million depositary receipts for shares, 34 million are new on the stock exchange. In addition, parent company LG Chem announced to list 8.5 million of its LGES shares at the same price range. After the IPO, LGES could have a market capitalization of up to EUR 52.5 billion.

Considering CATL’s market cap (around $220 billion), early analysts said: Reuters that the stock was undervalued. “It’s too cheap,” said Rho Woo-ho, an analyst at Meritz Securities, for example. The exact price will not be determined until January.

“With this IPO, we are preemptively responding to the demand for the lithium-ion battery market, which is expected to grow rapidly,” said Kwon Young Soo, CEO of LGES. LGES intends to invest the proceeds in further growth and expansion of its production capacities.

LGES supplies, among others, Tesla’s Chinese Gigafactory, General Motors, but also the South Korean manufacturer Hyundai.

reuters.com, koreaherald.com