LG Energy Solution Raises 1.5 Trillion KRW for US Investment
[Asia Economy Reporter Choi Dae-yeol] LG Chem announced on the 26th that its subsidiary LG Energy Solution Michigan, which operates the battery business in the North American region, will conduct a paid-in capital increase to raise $681 million (7.881 billion KRW) in facility funds. Including the amount borrowed locally, a total investment of 1.5762 trillion KRW will be made to expand battery facilities.
LG Energy Solution currently operates a factory in Michigan producing batteries used for electric vehicles and energy storage systems (ESS) with an annual capacity of 5 GWh. In addition, it is building two joint venture plants with the local number one automaker General Motors (GM) in Ohio and Tennessee with an annual capacity of 70 GWh, and last month agreed to build a joint venture plant with Stellantis with an annual capacity of 40 GWh. Including one or two additional independently operated plants, LG Energy Solution plans to secure a total battery production capacity of 150 GWh in the United States alone. This capacity is sufficient to supply 2 million mid-sized sedan pure electric vehicles. The sites for the Stellantis joint venture plant and additional independent plants have not yet been decided.
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With this additional fundraising, the amount LG has decided to invest in the North American region is estimated to approach 7 trillion KRW. According to the quarterly report, as of the end of September, the amount decided for investment in the United States was 5.2805 trillion KRW, of which a little over 800 billion KRW has been invested so far. The company faces significant costs due to recall issues and other burdens, and there are concerns that fundraising may not be easy as the initial plan for the initial public offering (IPO) schedule has been delayed. However, in April this year, the company ended its lawsuit with SK and agreed to receive 2 trillion KRW as a settlement payment.
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