- The company has decided to separate battery business to better optimise the management in today’s fast-changing market environment
- The source said that more than 82 per cent of LG Chem shareholders who attended the meeting voted in favour of the plan
As per a report by Reuters, LG Chem shareholders approved a plan to separate its battery business into a new company. It added that this unit, which will be launched on first December will first become a wholly-owned subsidiary tentatively named LG Energy Solutions, and then up to 30 per cent of the company’s shares may be listed in an initial offering in about a year.
The report added that LG Chem chief executive officer Hak Cheol Shin told a shareholder meeting in Seoul that while the battery business is expected to post enormous growth, competition is intensifying from not only other battery makers but automakers. He added that the company has decided to separate battery business to better optimise the management in today’s fast-changing market environment
Fundraising options to expand investments at the right time
As per the report, the source said that more than 82 per cent of LG Chem shareholders who attended the meeting voted in favour of the plan. LG Chem declined to comment. LG Chem chief financial official Cha Dong-seok said that with the split-off of the battery business, the company can use various fundraising options to expand investments at the right time, and based on this it can secure a clear global No.1 position by widening the gap with rivals.
He added that the company’s growth was constrained by rising debts as a result of a sharp increase in capacity investments. When asked about selling stakes to strategic investors in the run-up to the IPO, Shin told Reuters the company was reviewing various options.