Glass Lewis recommends LG Chem investors approve battery spin-off
Jae-Yeon Ko
Oct 15, 2020 (Gmt+09:00)
Leading proxy adviser Glass Lewis has recommended that LG Chem Ltd. investors vote to approve the company’s plan to split off its battery business at a shareholder meeting set for Oct. 30.
According to securities industry officials on Oct. 15, the US proxy adviser said in a report to its clients that LG Chem’s planned spin-off of its battery unit is just a “technical” matter to be implemented as part of its internal business reorganization.
LG Chem’s shareholders won’t be affected by the move as the battery unit will be 100%-owned by the company even after the spin-off, it said.
Industry watchers say the recommendation by the US proxy adviser, which often exerts its clout over institutional investors in major corporate decisions, could work in favor of LG Chem at its shareholder meeting.
LG Chem, South Korea’s largest chemical and electric vehicle battery maker, angered its investors in mid-September when it announced plans to split off its lucrative battery business into a separate entity to carve out value as global EV demand increases rapidly.
On Wednesday, LG Chem said it will offer a dividend of at least 10,000 won a share over the next three years in an effort to appease investors concerned about share value dilution.
The spin-off plan is widely expected to be approved at LG Chem’s shareholder meeting given that LG Corp., the group’s holding company, owns a 33.34% stake in LG Chem as its largest shareholder.
The market is closely watching any move by the National Pension Service, which is LG Chem’s second-largest shareholder with a 9.96% stake.
Write to Jae-Yeon Ko at yeon@hankyung.com In-Soo Nam edited this article.