LG Chem on Friday finalized its plan to split-off its battery business.
The company held a shareholders’ meeting to vote for the move.
Out of its total shareholders, 77.5% attended the meeting __ 82.3% of those attending the meeting voted for the split-off. This amounted to 63.7% of issued shares with voting rights.
Earlier this week, the National Pension Service (NPS), which holds a 10% stake in LG Chem, said it was against the move, saying it damaged shareholders’ value. There was concerns that minority shareholders, who combined also own around a 10% stake in the South Korean energy company would oppose to move.
But this didn’t happen on Friday. LG Corp., which owns a 30% stake, and foreign investors, which accounts for around 40% stake, as well as some minority shareholders likely voted for the split-off.
LG Chem CEO Shin Hak-cheol said while the company expected incredible growth in its battery business, the competition was also becoming fiercer in the sector from competitors and automobile companies entering the market.
The split-off was being done to make a company with management optimized for the battery business and maintain LG’s leadership in the sector, Shin added.
With the passing of the motion, the new company will be formed on December 1 with a capital of 100 billion won and a capital reserve of 5.85 trillion won.
LG Chem said the new company, tentatively called LG Energy Solution, will aim for annual sales of 30 trillion won by 2024.