The big Korean LG Energy Solution, the world‘s second largest producer of batteries for electric cars with 21.5% of the market against 32.5% of the Chinese Catl, has appreciated the shares to raise 10.7 billion dollars in the largest initial public offering of South Korea, overshadowing the swarm of doubts left by several episodes of fires that led a few months ago to a huge recall (73,000 units) of Chevrolet Bolt electric cars (from the GM group) and to the change of CEO. The guide was entrusted to Kwon Young-soo.
The shares were quoted at the highest possible levels, equal to 252 dollars (300 thousand won), as reported by LG Energy itself in the document filed in Seoul. The valuation is therefore $ 59 billion, third on the Kospi list, behind chip makers Samsung Electronics and SK Hynix Inc. The offering was subscribed 2,023 times by institutional investors, LG Energy said. LG Energy’s IPO is led by KB Securities and Morgan Stanley. The shares will be traded from January 27th.
The Korean giant is looking to increase production capacity to meet the growing global demand for electric car batteries and improve the quality of its cells following the $ 1.9 billion recall for the Chevrolet Bolt that burned down. And of course it aims to shorten the distance from the market leader, the Chinese Contemporary Amperex Technology (Catl). LG has factories in South Korea, China, Poland and the United States, but it is precisely in the United States that it aims to expand most to support GM and Ford in the electrification process of fleets. The Korean company is in talks with Japan’s Honda to build a $ 3.5 billion plant in the US capable of producing batteries for 600,000 cars a year.
By 2025, nearly half of all electric cars produced in the United States could use LG Energy cells, according to Hyuk Jin Yoon, analyst at SK Securities in Seoul. in the United States, ”Yoon said.
After all, the cars on fire between August and September do not seem to have damaged relations with the first American manufacturer. GM plans to build its third US battery plant with LG in Michigan at a cost of more than $ 4 billion, Bloomberg reported in December.