LG Energy Solution raises $10.8 billion in South Korea’s largest IPO

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South Korean battery maker LG Energy Solution (LGES) raised $10.8 billion (approx.

LGES shares were valued at KRW 300,000 (approx. Rs. 18,710 crore) apiece, at the upper end of a range announced in a regulatory filing last month, which grossed KRW 12.8 trillion (approx. Rs. 79,840 crore).

The listing, which is set to take place on January 27, will be the country’s largest following Samsung Life’s IPO in 2010, valued at KRW 4.8 trillion (about Rs. 29,945 billion).

LGES ranks the pricing at KRW 70.2 trillion (about Rs. 4.37,930 billion), making it the third most valuable company in South Korea after Samsung Electronics and SK Hynix.

GES, the battery subsidiary of LG Chem, supplies Tesla, General Motor and Volkswagen AG, among others.

A total of 1,988 domestic and overseas institutional investors submitted bids, LGES filings show, valuing the total bids at a record US$12.8 trillion (about Rs.9,48.77.18 crore) .

According to LGES, the institutional book for the IPO was covered 2,023 times – the largest ever for an IPO in South Korea.

LGES expects to offer 34 million new shares in the IPO and parent company LG Chem plans to offer 8.5 million existing shares.

The parent company will own 81.8 percent of LGES after the listing.

The IPO comes as global battery electric vehicle (EV) sales, estimated at 2.5 million units in 2020, are expected to increase more than 12-fold to 31.1 million by 2030, accounting for nearly a third of new vehicle sales Consulting firm Deloitte.

Analysts said they are closely monitoring LGES’ IPO and its shares’ trading later this month to assess the health of the 2022 IPO market.

South Korea experienced its hottest IPO market on record last year. More than 20 companies went public on the KOSPI main market, raising about 17 trillion won, surpassing the previous record 8.8 trillion won set in 2010, according to the Korea Exchange.

© Thomson Reuters 2022

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