LG Energy Solution plans to complete its planned initial public offering in South Korea in January 2022. The battery maker expects to offer 42.5 million shares at a price between 257,000 to 300,000 won each, a regulatory filing said.
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LGES was 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 will cost the equivalent of between 193 and 225 euros, which would result in a volume of 9.56 billion euros with the targeted maximum range.
Even at the lower end of the range, LGES would be South Korea’s largest IPO, according to Reuters, surpassing Samsung Life Insurances. The Samsung division raised €4.3 billion in its 2010 IPO. For LGES, the lower end of the range would correspond to a volume of 8.2 billion euros.
Of the 42.5 million share certificates, 34 million will be newly placed on the stock exchange. In addition, the parent company LG Chem announced that it would place 8.5 million of its LGES shares on the stock exchange at the same price range. After the IPO, LGES could have a market capitalisation of the equivalent of up to 52.5 billion euros.
Given CATL’s market capitalisation (around 220 billion euros), early analysts told 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 set until January.
“Through this IPO, we are preemptively responding to the demand for the lithium-ion battery market, which is expected to see rapid growth,” said Kwon Young Soo, chief executive officer of LGES. LGES intends to invest the proceeds in further growth and the expansion of its production capacities.
LGES supplies, among others, Tesla’s Chinese Gigafactory, General Motors, but also the South Korean manufacturer Hyundai.
Update 28 January 2022
LG Energy Solution has completed its announced IPO in Seoul, and very successfully at that. LGES shares started trading at 597,000 won (443 euros) – double the issue price of 300,000 won (222 euros). At the close, the shares were trading at 505,000 won (347.80 euros), up 68 per cent. The market capitalisation was thus around 118 trillion won (86 billion euros); based on the issue price, the valuation was 52.5 billion euros. The IPO brought in around ten billion euros for the battery manufacturer.
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