Contrary to Previous Predictions
The National Pension Service (NPS), the second-largest shareholder in LG Chem with a shareholding of 10.4 percent, has decided to object to the company’s plan to split off its battery business unit.
This is contrary to previous predictions. Earlier, Institutional Shareholder Services, Glass Lewis and Korea Corporate Governance Service decided to vote in favor of the plan. “We are well aware of why LG Chem is planning to split it off, and yet the plan may have an adverse impact on shareholder value,” it explained.
An LG Chem shareholder meeting is scheduled for Oct. 30 and the plan may not be passed there with the NPS objecting to it. Although most domestic and foreign asset management firms are likely to advocate the plan, the shareholding of the parent company of LG Chem and its affiliates, 30.6 percent, is not absolute. In addition, domestic institutional and individual shareholders account for 19 percent, which is not negligible, and foreign shareholders account for no less than 40 percent.
In the domestic stock market, the company’s plan announced on Sept. 15 has seriously backfired. Individual investors began to sell their shares that day and the stock price has dropped about 20 percent from about 760,000 won per share.