LG Energy Solution seeks nod for IPO that IFR says may raise $10-$12 bln (updated)

SK IE Technology

08/06/2021 10:26

(Adds analyst comment; uses full name or abbreviation LGES for
company throughout)
    By Heekyong Yang and Joyce Lee
    SEOUL, June 8 (Reuters) - Auto battery maker and Tesla Inc
 TSLA.O  supplier LG Energy Solution (LGES) applied for
preliminary approval of an initial public offering (IPO) that
publication IFR said could raise $10 billion-$12 billion in
South Korea's biggest ever listing.
    LGES and the Korea Exchange announced the application for
approval of the previously flagged IPO on Tuesday, without
mentioning its size. IFR reported the potential size earlier in
June, citing people close to the deal.
    LGES, wholly owned by LG Chem Ltd  051910.KS  from which it
was carved out last year, said the IPO was planned for 2021. A
spokesperson declined to comment on the IPO size on Wednesday
and said it will be decided taking into account the company's
future capital expenditure and financial structure. 
    A $10 billion-$12 billion IPO would be more than double the
current biggest ever listing in South Korea - the 2010 IPO of
Samsung Life Insurance  032830.KS , which was worth 4.9 trillion
won ($4.39 billion).  urn:newsml:reuters.com:*:nIfpb0lM1L
    It would also come in a banner year for listings of
companies operating in South Korea that has already seen the
$4.6 billion U.S. IPO of Coupang  CPNG.N  and the $2 billion
domestic float of SK IE Technology Co Ltd  361610.KS . 
    LGES is one of the world's top electric vehicle (EV) battery
makers, supplying Tesla and General Motors Co  GM.N .
    The IPO plan comes as global sales of battery-powered
electric cars are expected to have reached nearly 2.5 million in
2020 and are set to rise by 70% in 2021, according to IHS
Markit.
    "With automakers racing towards electrification and
investors seeing it as the auto industry's next big growth
opportunity, LGES' IPO will likely attract strong demand," said
Cho Hyun-ryul, an analyst at Samsung Securities.
    LGES said it plans to use the proceeds of the IPO to secure
business competitiveness and expand its facilities in response
to the growing market demand for EVs. 
    Analysts said the funds could be used especially for its
investment in battery production in the United States. 
    In March, LGES announced plans to invest more than $4.5
billion in its U.S. battery production business by 2025.
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($1 = 1,115.6000 won)

 (Reporting by Heekyong Yang; Additional reporting by Joyce Lee;
Editing by Kirsten Donovan, Louise Heavens and Muralikumar
Anantharaman)
 ((Heekyong.Yang@thomsonreuters.com;))