South Korean electric vehicle battery makers opened the eventful week on a weak note as investors wait for cues in their future investment.

The country’s top battery maker LG Chem Ltd. will hear the final U.S. court ruling on its dispute with local rival SK Innovation Co. on Monday. Its ambitious scheme to spin off its lucrative battery business would also be put to a shareholder vote on Friday.

The U.S. International Trade Commission (ITC) would deliver its final determination on Monday (U.S. time), putting an end to the legal battle that started in April 2019 after LG Chem sued its smaller rival over alleged theft of commercial secrets.

In February, the ITC had made a preliminary ruling in LG Chem’s favor, which SK Innovation dissented.

Observers are betting on LG Chem’s victory as the ITC has rarely overturned its preliminary decision. If the court sides with LG Chem, as expected, SK Innovation would be banned from selling secondary battery products in the United States and would have to peg its hopes on a veto from the U.S. administration.

Some say SK Innovation could win some favors from its $2.6 billion investment pledge to build two electric vehicle battery plants in Georgia. But the odds are far from certain as LG Chem has also made massive investments in Michigan and Ohio over the years.

The legal fight between the two companies is not yet over as LG Chem has filed another ITC case against SK Innovation over alleged patent infringements.

Separately, LG Chem is scheduled to hold a shareholder meeting on Friday to vote on its plan to spin off the battery unit into a standalone company. The decision would largely hinge on the National Pension Service, Korea’s largest public pension fund that holds a 10.20 percent stake in the company. A majority of the proxy advisory firms are reportedly in favor of the spinoff, while some others are against it.

LG Chem shares took a toll following the demerger announcement last month. The stock plunged 11.16 percent to 645,100 won on Sept. 17, just two days after the announcement, and dropped to as low as 611,000 won a week later.

Its rebound a few days later proved short-lived after fires were reported from Hyundai Kona EVs powered by LG Chem batteries. Shares regained lost ground last Thursday after the company confirmed its third-quarter earnings hit an all-time high of 902.1 billion won, up 158.7 percent from a year earlier. Sales also surged to a record 7.5 trillion won, up 8.8 percent on year. Buoyed by the results, the shares closed the week at 650,000 won.

LG Chem’s stock fell 0.62 percent to close Monday at 646,000 won.

Its smaller rivals Samsung SDI Co. and SK Innovation are also set to release strong earnings reports this week. Samsung SDI’s operating profit is estimated to have surged 32 percent on year to 219.8 billion won and sales 17 percent to 2.9 trillion won.

SK Innovation shares closed Monday down 3.66 percent and Samsung SDI down 1.65 percent.

By Pulse

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