LG Electronics Board Resolves to Sell 15% Stake in Indian Subsidiary... Speeds Up Listing Process

Secondary Offering Without New Share Issuance
Board Resolves to Sell 15% Stake on September 30
101,815,859 Shares... Disposal Date and Amount to Be Determined
IPO Process Expected to Be Completed as Early as Next Month

On September 30, LG Electronics announced through a public disclosure that its board of directors had resolved to sell a 15% stake (101,815,859 shares) in its Indian subsidiary. The disposal date and amount have not yet been determined. LG Electronics plans to soon submit the final securities registration statement to the Securities and Exchange Board of India (SEBI), and explained that once this statement is approved, the public offering price band and the planned disposal date will be decided. The company is expected to complete the initial public offering (IPO) process as early as next month.

Seoul Yeouido LG Twin Towers panorama. /Photo by Kang Jinhyung aymsdream@

Previously, LG Electronics had been taking the necessary steps to list its Indian subsidiary. In December of last year, the company submitted a preliminary listing review document, officially beginning preparations for the listing, and in March of this year, it received preliminary approval for the listing from SEBI. As a result, there were initial expectations that the listing could take place as early as the first half of this year. However, considering volatility in global markets, including the Indian stock market at the end of April, the company has proceeded cautiously with the listing schedule.

The listing of LG Electronics’ Indian subsidiary will be conducted through a secondary offering, selling 15% of existing shares without issuing new shares, with 100% of the proceeds flowing directly to the headquarters. This method allows the company to secure a large amount of cash without financial risks such as interest expenses, which is expected to significantly improve financial soundness. According to recent estimates from local media, the size of the public offering is expected to be around 115 billion rupees (approximately 1.8 trillion won), which far exceeds LG Electronics’ separate cash and cash equivalents of 1.1 trillion won as of the end of the second quarter.

Kim Woonho and Kang Mingu, researchers at IBK Investment & Securities, stated in a company analysis report published on September 18, "Although the fourth quarter is typically an off-season, the listing of the Indian subsidiary is expected to greatly improve cash flow." In February, the international credit rating agency Moody’s also commented, "The upcoming IPO of LG Electronics’ Indian subsidiary will further strengthen the company’s financial metrics."

The listing of LG Electronics’ Indian subsidiary is also in line with the recent moves of global companies. An increasing number of global firms are leveraging the unique characteristics of the Indian capital market to raise funds and accelerate their local business operations. Prior to LG Electronics, companies such as Whirlpool (home appliances), Oracle (IT), Moody’s (credit rating), Suzuki Motor (automobiles), and Nestle (food) have listed their subsidiaries in India.

This content was produced with the assistance of AI translation services.