South Korea’s LG Chem Ltd. won’t be able to list the separated battery-making unit within the first year and will likely offer 20 to 30 percent in initial offering when it goes public in early 2022 to hold onto a controlling stake.
“Even if we immediately go to work (after the standalone battery unit is launched on Dec. 1), it would take at least a year to ready an IPO,” said Cha Dong-seok Friday, chief financial officer of LG Chem in a conference call hurriedly arranged on the following day of the announcement of the spinoff plan that upset investors who invested heavily in the company this year on burgeoning battery outlook.
“IPO customarily offers 20 to 30 percent of available shares. LG Chem will maintain the absolute majority stake after the IPO,” he said.
He appeased investors’ jitters about dilution in their share-holding, maintaining the spinoff can add upside to the stock outlook.
LG Chem shares closed 3.26 percent higher at 666,000 won ($573.99) on Friday after losing 6.11 percent a day earlier on massive sell-offs by retail investors who are concerned about share dilution.
“With the demerger, LG Chem will be able to focus its investment and management capability on traditional chemicals, new materials and bio products businesses to prove its true corporate value,” said Cha.
“If necessary, the company will be aggressive in seeking M&A opportunities and partnerships with other companies to expand the businesses.”
By Lee Ha-yeon
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