LG Electronics, is planning an initial public offering (IPO) for its Indian branch, LG Electronics India Pvt Ltd (LGEIL), according to Korean media Invest Chosun.
The company wants to use the strong sales of its home appliances in India to raise a lot of money through the stock market, especially from sales in Europe. This could bring in hundreds of billions of South Korean won.
LG Group has talked to foreign investment banks and local law firms about listing LGEIL. JP Morgan and Morgan Stanley might manage the IPO, but this is not confirmed yet. LG Electronics, based in Seoul, is known for its appliances and consumer electronics. It is the fourth-largest chaebol (family-owned conglomerate) in South Korea.
LG Electronics is expected to soon choose an underwriter to speed up the IPO process for its Indian branch. The company had planned an IPO for LGEIL in the early 2000s but postponed it due to bad market conditions, focusing instead on setting up factories and dealerships in places like Pune.
LGEIL could raise at least $500 million through the IPO, likely by selling existing shares, especially those held by Hyundai Motors, instead of issuing new ones. LGEIL’s net assets are estimated at $825 million, with its corporate value projected to be between $2.1 billion and $4.3 billion.
This move by LG Electronics follows Hyundai Motor’s similar step. Hyundai filed draft papers with the Securities and Exchange Board of India (SEBI) on June 14 to offer up to 142 million shares out of its total of 812 million in an IPO.
