The LG Energy Solution logo is pictured on a smartphone in front of the stock chart displayed in this illustration taken on December 4, 2021. REUTERS / Dado Ruvic / Illustration

SEOUL, Dec. 7 (Reuters) – LG Energy Solution (LGES) is expected to raise up to 12.8 trillion won ($ 10.87 billion) in what could be South Korea’s largest initial public offering, as the battery maker is seeking funds to expand and meet the growing demand for EV Batteries.

Even at the lower end of its price bracket, LG appears to top the nation’s biggest list to date, Samsung Life Insurance’s IPO (032830.KS) of 4.9 trillion won in 2010.

“With this IPO, we are responding preemptively to demand from the rapidly growing lithium-ion battery market,” LGES chief executive Kwon Young Soo said in a statement.

LGES is the 100% subsidiary of LG Chem Ltd (051910.KS) and supplies Tesla Inc (TSLA.O), General Motor Co (GM.N) and Hyundai Motor Co (005380.KS), among others. Read more

It plans to offer 34 million new shares in an indicative range of 257,000 to 300,000 won per share, it said in a regulatory filing.

LG Chem plans to offer 8.5 million existing shares in the same price range, according to a separate filing.

Within that range, LGES’s valuation would reach 70.2 trillion won ($ 59.55 billion), the company said in a statement.

The IPO could make it South Korea’s third-most valued company after Samsung Electronics Co Ltd (005930.KS) and SK Hynix Inc (000660.KS), but analysts have consistently said the valuation is under-valued. estimated.

“It’s too cheap,” said Rho Woo-ho, analyst at Meritz Securities, adding that LGES ‘production capacity target for 2025 is similar to that of its biggest Chinese rival Contemporary Amperex Technology Co Ltd ( CATL) (300750.SZ).

CATL’s market capitalization is currently around 1.6 trillion yuan ($ 251.28 billion).

“I think they have intentionally lowered the price range, first to build consensus in the market that it’s good value, and second, because (parent company) LG Chem intends to Keeping a stake of about 80%, the number of shares traded will be very high. small, which will drive up demand and the share price. “

Pricing is expected to be finalized in mid-January, with a listing in Seoul expected later this month.

South Korea is experiencing its hottest IPO market on record this year. More than 20 companies went public on the main KOSPI market (.KS11), raising around 17 trillion won, surpassing the 8.8 billion won raised in 2010, the largest year on record, according to the Korea Stock Exchange. Read more

Global sales of electric vehicles, estimated at 2.5 million vehicles in 2020, are expected to increase more than 12-fold to reach 31.1 million by 2030 and account for nearly a third of new vehicle sales, according to the consulting firm Deloitte.

KB Securities and Morgan Stanley will lead the proposed transaction. Bank of America, Citigroup, Daishin Securities, Goldman Sachs and Shinhan Investment Corp have also been appointed bookkeepers. Read more

($ 1 = 1,177.0600 won)

($ 1 = 6.3673 yuan Chinese renminbi)

Reporting by Heekyong Yang and Joyce Lee; Additional reporting by Scott Murdoch; Editing by Louise Heavens and Jason Neely

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