LG Energy Solution to speed up IPO process for October listing

LG Energy Solution Ltd. aims to accelerate the process for South Korea’s largest-ever initial public offering that is expected to raise more than 10 trillion won ($8.6 billion) as the local exchange’s approval for its listing is imminent.

The Korea Exchange is about to approve its listing soon as it is in the final stage of assessments based on additional data submitted by the company, according to the investment banking (IB) industry sources on Aug. 11.

The exchange had planned to complete the review in the middle of this month. But it was slightly delayed due to uncertainties about how to reflect the settlement money it received from SK Innovation Co. following their two-year lawsuits, as well as the provisions set aside to cover the recall costs for General Motor Co.’s Bolt EV.

LG Energy plans to begin the bookbuilding process in September after getting a final approval from the Korea Exchange later this month.

“Since the IPO is the largest-ever in the capital market history, the industry will keep an eye on it,” said an IB industry source.

The company is expected to win the approval easily, according to the brokerage industry. Its earnings in the first half significantly improved and it set aside a provision for the Bolt recall.

LG Electronics Inc. and LG Chem Ltd., which wholly owned LG Energy Solution, revised down their second-quarter earnings, reflecting a combined provision of 325.6 billion won. LG Electronics has supplied GM with battery modules made with battery cells produced by LG Energy. That is unlikely to have an impact on the IPO process although the provision’s size could be changed on the recall process and causes.

LG Energy reported 815 billion won in operating profit and 5.1 trillion won in sales during the April-June period, record quarterly earnings. The profit was more than a double of 341 billion won in the first quarter as LG Energy and SK Innovation reached an agreement to end their two-year legal dispute in the US overver trade secret infringement and battery-related patent violations. SK agreed to pay 2 trillion won --  one trillion won in cash compensation and one trillion won in royalties – to LG.

Write to Ye-Jin Jun at ace@hankyung.com
Jongwoo Cheon edited this article.