LG Energy Solution hires KB Securities, Morgan Stanley to manage $10 bn IPO

[Photo provided by LG Energy Solution Ltd.]

LG Energy Solution Ltd., the electric vehicle battery making spinoff of LG Chem Ltd., has rounded up the underwriting team for what would be the biggest initial public offering in Korean corporate history.

The bookrunners are KB Securities Co. and Morgan Stanley, with Daishin Securities Co., Shinhan Investment Corp., Goldman Sachs, Bank of America Merrill Lynch and Citigroup Global Markets as joint underwriters.

The mega IPO size of LG Energy Solution, whose valuation is estimated at up to 100 trillion won ($89.7 billion), meant it needed a syndicate of at least six sponsors.

The battery maker is aiming to go public on the benchmark Kospi by the end of the year. Analysts project the company to raise at least 10 trillion won from the offering, more than double the current record in Korea set by Samsung Life Insurance in 2010 with 4.9 trillion won.

LG Energy Solution was created on Dec. 1 as a spinoff of LG Chem’s EV battery making unit. The South Korean company had been the world’s No. 1 EV battery maker until October 2020, but lost the title to China’s CATL the following month as EV sales took off in China. Based on January-November sales of 2020, LG Energy Solution claims a 22.6 percent share in the global EV battery market, second only to CATL, which holds 24.2 percent, according to SNE Research.

The need for aggressive investment to expand its global market share and widen the gap with followers has been cited as a key reason for LG Energy Solution’s accelerated IPO plans. Some say the company might also consider raising funds through pre-IPO placement.

Shares in LG Chem fell 2.24 percent to close Friday at 917,000 won.

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