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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] LS is reportedly reviewing an internal plan to temporarily suspend the initial public offering (IPO) of Essex Solutions, a subsidiary at the center of controversy over overlapping listings within the group. While the company had previously expressed its intention to proceed with the IPO by presenting additional measures to enhance shareholder value, growing criticism—including from the political sphere—has raised the possibility of a strategic shift.
According to industry sources on the 25th, LS is keeping various options on the table, including a temporary halt to the listing, as opposition continues throughout the IPO process. A second investor briefing on Essex Solutions, which had been scheduled to take place later this month, has yet to be finalized.
LS has been pursuing the listing of Essex Solutions, a U.S.-based sub-subsidiary that manufactures specialty magnet wire used in electric vehicle motors and transformers. The IPO was intended to raise approximately KRW 500 billion, which would be invested in expanding production facilities in the United States, positioning the company to capitalize on the ongoing expansion of power infrastructure. LS has projected that, if the investment plan proceeds smoothly, Essex Solutions’ corporate value could more than triple by 2030.
However, controversy has intensified amid concerns that an IPO of Essex Solutions could dilute the corporate value of its parent, LS, to the detriment of existing shareholders. In response, LS held an investor briefing in November last year to explain the rationale behind the listing and recently stated that it is considering allocating shares to existing LS shareholders separately from the public offering.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
