S Korean pension fund NPS to oppose LG Chem’s battery split-off plan

Photo: Reuters

South Korea‘s National Pension Service (NPS) will oppose LG Chem’s plan to separate its battery business into a new company, the NPS said on Tuesday.

It cited concerns about damage to shareholder value, including the possibility of diluting the equity value.

LG Chem said in a statement that it very much regrets that NPS opposes the plan when most domestic and foreign proxy advisers including Institutional Shareholder Services back it, adding it will actively communicate with shareholders.

“Although NPS is the second-largest shareholder of LG Chem…it is likely that dissenting votes would have little impact as most proxy advisers have recommended endorsement of LG Chem’s split-off plan,” Hwang Yu-sik, an analyst at NH Investment & Securities told Reuters.

LG Chem, an electric car battery supplier for Tesla Inc and GM, said last month it plans to separate the business as the electric vehicle market takes off.

The unit will first become a wholly-owned subsidiary tentatively named LG Energy Solutions and then up to 30% of the company may be listed in an initial offering in about a year.

Chief Executive Officer Hak Cheol Shin said during an interview with Reuters that the plan to separate the battery business is necessary to fund large-scale investments in factory expansion.

NPS, the world’s third-largest pension fund with 777 trillion won ($689.31 billion) in assets, was the second-largest shareholder of LG Chem with a 9.96% stake as of end-June, after LG Corp’s 33.34% stake, a company filing showed.

The shareholder meeting to decide the issue will be held on Oct. 30.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.