LG Chem's Strategic Financial Move

In a significant financial strategy, LG Chem has revealed plans to issue approximately 1.4 trillion won (around $1 billion) in exchangeable bonds (EB) overseas. These bonds will be backed by shares of LG Energy Solution, marking a pivotal moment for both companies.

Details of the Exchangeable Bonds

The issuance involves 4,129,409 shares of LG Energy Solution, equating to a 1.76 percent stake. Scheduled for June 16, the bonds will mature in three years, featuring a coupon and yield-to-maturity set at 2 percent. Targeting institutional investors in Europe and Asia, the bonds will find their place on the Vienna Stock Exchange.

Exchange Rights and Refinancing Strategy

Bondholders are granted the right to exchange their bonds for LG Energy Solution shares between July 27, 2025, and June 9, 2028, at an exchange price of 337,700 won per share. This move is seen as a refinancing strategy for the existing EBs issued in 2023, managed by HSBC, Bank of America, and Morgan Stanley.

Background and Market Context

Two years prior, LG Chem embarked on a similar journey, issuing EBs worth 2.6 trillion won with LG Energy Solution shares as collateral. With the current market price at 307,000 won, significantly lower than the initial exchange price of 687,500 won, LG Chem anticipates the need for refinancing, prompting this latest issuance.