EV battery-maker LG Energy Solution plans bumper IPO in S. Korea to raise up to $10.8 billion

• The IPO is expected to raise around 10.9 trillion to 12.8 trillion Korean won

• The EV battery giant is expected to be valued between $51 billion and $59 billion

LG Energy Solution Ltd., the manufacturers of electric car batteries, has begun accepting investor bids for a share sale to raise up to $10.8 billion. 

According to the term sheet, the initial public offering is expected to raise around 10.9 trillion to 12.8 trillion Korean won ($9.2 billion to $10.8 billion). 

On January 27, the company's shares will begin trading on the South Korean stock market. The transaction will surpass the 4.9 trillion won obtained by Samsung Life Insurance Co. in its IPO in 2010.

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The EV battery giant is expected to be valued between $51 billion and $59 billion, the news reports said. 

According to a term sheet, the business intends to utilize the funds to increase capital spending, repay debt, and satisfy working capital requirements. One-fifth of the shares sold will be existing stock provided by LG Chem Ltd, the business's parent company.

LG Energy Solution's indicated market value following the offer may reach $59 billion, the term sheet showed. Investors will be offered 42.5 million shares for 257,000-300,000 won each.

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Morgan Stanley, BofA Securities, and Citigroup are among the financial institutions advising on LG Energy Solution's planned share sale.

S. Korea’s IPO market 

According to statistics published by Market Insight, The Korea Economic Daily's capital market news site, public offerings for 114 firms this year raised a record-high sum of almost 20.5 trillion won.

The amount is nearly double the previous high of 10.9 trillion won set in 2010. Excluding special purpose acquisition companies, 88 firms have completed their listings in 2021 as of today (SPACs.) 

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After LG Energy IPO which is regarded as the country's largest share sale transaction this year, Hyundai Engineering Co., a subsidiary of Hyundai Motor Group, plans to go public next month.

Through an IPO, the business hopes to raise between 926.4 billion won and 1.21 trillion won. Based on the anticipated IPO price range, its market capitalization might reach 6.05 trillion won.

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($1 = 1,195.26 won)

Inputs from WSJ

Picture Credits: ET Auto