Auto battery maker and Tesla Inc supplier LG Energy Solution (LGES) applied for preliminary approval of an initial public offering (IPO) that publication IFR said could raise $10 billion-$12 billion in South Korea's biggest ever listing.
The IPO plan comes as global sales of battery-powered electric cars are expected to have reached nearly 2.5 million in 2020 and are set to rise by 70% in 2021, according to IHS Markit. "With automakers racing towards electrification and investors seeing it as the auto industry's next big growth opportunity, LGES' IPO will likely attract strong demand," said Cho Hyun-ryul, an analyst at Samsung Securities.
LGES said it plans to use the proceeds of the IPO to secure business competitiveness and expand its facilities in response to the growing market demand for EVs.
Tesla Battery Supplier LG Collaborates with Indonesia Over $1.2B Battery Plant. LG Corp and State-owned Indonesia Battery Corporation (IBC) have collaborated to build a $1.2 billion new battery plant with 10-gigawatt hours (GWh) capacity, Reuters reports based on Indonesian investment minister. Last year, Tesla Inc (NASDAQ: TSLA) supplier LG Energy Solution had inked a .8 billion electric vehicle (EV) battery investment agreement with Indonesia. The plant will be built in Bekasi, Jakarta.
LG Energy Solution was spun off from LG Chem last year. The first phase of construction will have a production capacity of 10 GWh, which will be later used for Hyundai Motor Co EVs. Earlier this year, Hyundai was obligated to replace battery systems for 82,000 EVs following a product recall. The LG consortium includes LG Chem Ltd, LG Energy Solution, LG International, South Korean steelmaker POSCO, and Chinese cobalt company Huayou Holdings. LG Energy Solution was in discussions to manufacture Tesla’s latest advanced battery in the U.S. and Europe. Indonesia expects to produce 140 GWh worth of batteries by 2030.
GM and LG Chem announced Friday plans to build a second U.S. battery cell factory — a $2.3 billion facility in Spring Hill, Tennessee that will supply the automaker with the cells needed for the 30 electric vehicle models it plans to launch by mid decade.
So LG is alongside Tesla , Hyundai , GM and probably others. The IPO will be interesting as these companies may take a position - i read somewhere (cant find it now) Tesla wanted to go in-house and with having a position in LGs new ipo they could possibly make that happen.
Ipo may produce funds in which could contribute to the QPM project funding via offtakes still. ALOT of battery materials are required and QPM has a good shot at taking a lead market position.
I would like yo see more companies come to fruition using the DNI method as this will further reduce the worries of using a new tech.
Either way QPM WILL have first mover status and already has binding offtakes with probably the best companies to be with.
QPM Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
