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Photo = Yonhap News |
[Alpha Biz= Kim Jisun] Seoul, October 1 – LG Chem Ltd. announced that it will secure approximately KRW 2 trillion in liquidity by partially selling its stake in subsidiary LG Energy Solution.
According to the disclosure, LG Chem plans to dispose of shares worth KRW 1.9981 trillion in LG Energy Solution through a Price Return Swap (PRS) contract. Under the arrangement, LG Chem will pledge subsidiary shares as underlying assets, paying fees to securities firms or investors during the contract period and settling any differences arising from share price fluctuations.
Currently, LG Chem is the largest shareholder of LG Energy Solution with an 81.84% stake. The PRS contract will use 5.75 million common shares of LG Energy Solution as the underlying asset. The contract period is three years, with the reference price set at KRW 347,500 per share, based on the previous day’s closing price.
The scheduled disposal date is November 3, and LG Chem is expected to receive the proceeds on the same day. Following the transaction, LG Chem’s stake in LG Energy Solution will decline to 79.38%.
The company explained that the sale is intended to “enhance corporate value through financial structure improvement.” The funds will primarily be used to strengthen LG Chem’s balance sheet, including the repayment of borrowings tied to investments in advanced materials and biotechnology, both designated as next-generation growth drivers.
Preemptive Response to Global Minimum Tax
LG Chem also noted that the PRS transaction allows it to proactively adjust its ownership structure in preparation for the introduction of the global minimum corporate tax regime.
Under the framework—agreed upon by more than 140 countries—if the income of a multinational enterprise is taxed at less than 15% in a low-tax jurisdiction, the difference must be paid in the parent company’s home country.
If LG Chem were to hold 80% or more of LG Energy Solution, it would become liable for additional taxes under this regime. However, upon completion of the PRS transaction, its stake will be reduced by 2.46 percentage points to 79.38%, thereby mitigating exposure.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
