LGES and SK On employ very different strategies when it comes to going public. While the former is scheduled to go public in January 2022, the latter recently announced that it has no plans to push through an IPO.
LGES is picking up pace in completing public offerings by January 19 and will go public on January 27 with an estimated market valuation of KRW70 trillion (US$58.75 billion), according to South Korean media Money Today.
VP of LGES said IPO is the most urgent task since he took office this November. The company hopes to address the fast-growing demand for batteries by going public and becoming the most competitive battery manufacturer with the highest quality products.
According to sources, LGES wants to go public so soon because other battery manufacturers are also expanding fast and the company hopes to expand its production lines with the money they expect to raise through IPO, about KRW12.75 trillion. They currently have manufacturing facilities in South Korea, the US (Michigan state), Poland, and China and established a joint venture with Hyundai Motor in Indonesia.
In contrast, SK On is taking things more slowly, which has stated that they won't go public until at least 2023, but no less aggressive in expanding production capacity. SK On has production lines in South Korea, China, Hungary, and the US (Georgia state) and is setting up the third and fourth factories in the US.
SK On has got over 1.2TWh in orders – the highest among all battery manufacturers. Revenue of battery making is expected to reach KRW6.5 trillion in 2022 – which will help the company turn loss to profit. Sources said SK On will mainly use current cash flow, funds raised pre-IPO, and JVs to keep operations going on.
As for Samsung SDI, who's already a public-traded company, is not considering spinning off its battery department. The company expects to have over KRW2 trillion by the end of 2021 in cash balance.
