LG Energy Solution hires Morgan Stanley, KB Securities as lead IPO managers

South Korea-based LG Energy Solution has hired KB Securities and Morgan Stanley as the lead managers for its initial public offering, which is anticipated to become this year's IPO blockbuster.

According to investment banking sources on Jan. 28, LG Energy Solution, the battery unit under LG Chem Ltd., also selected five brokerage firms, Shinhan Investment Corp., Daishin Securities Co., Citigroup Global Markets Korea Securities, Goldman Sachs and Bank of America, as joint bookrunners.

The company is likely to begin the IPO process as early as August, with plans to get listed on the local bourse by the end of this year.

The company's enterprise value is estimated to be between 50 trillion won ($44.7 billion) and 80 trillion won. LG Energy Solution is seeking to raise between 10 trillion won and 15 trillion won.

LG Energy Solution's IPO is considered to be the largest to date in Korea, putting it in the limelight and closely watched by the financial industry.

Last December, LG Chem launched LG Energy Solution with plans to turn it into a publicly trading company to raise funds for its electric vehicle battery investments.

With the IPO proceeds, the company will expand its production capacity and increase research and development (R&D) investments to maintain its lead over global rivals. 

According to market research firm SNE Research, China’s CATL was the world’s top EV battery supplier with its 24.2% market share in the first 11 months of 2020. LG Chem came in second with 22.6%.

Last November, LG Chem was chosen to be the exclusive battery supplier for the US-based EV giant Tesla Inc.'s latest mid-size SUV Model Y.

Meanwhile, LG Chem reported 30.6 trillion won in revenue and 2.4 trillion won in operating profit in 2020, up by 9.9% and 185.1% from the previous year, respectively. It was the first time for the company to top 30 trillion won in revenue since its inception, driven by soaring battery sales.

Write to Ye-jin Jun at ace@hankyung.com
Danbee Lee edited this article.