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LG Chem Vice Chairman and CEO Shin Hak-cheol is leading a shareholders’ meeting at the firm’s head office in Seoul on Oct. 30. Photo courtesy of LG Chem

Chemical giant manages to win shareholders’ approval

Despite the opposition of the National Pension Service (NPS), LG Chem managed to win the approval of its shareholders to go ahead with its plan of splitting off its electric car battery unit.

On the base of the hard-earned green light, LG Chem is scheduled to launch the new affiliate, named LG Energy Solution, on Dec. 1 this year.

LG Chem held a shareholders’ meeting at its head office in Seoul on Oct. 30 where more than 80 percent of participants voted in favor of LG Chem’s idea.

Because LG Chem is required to support from at least two-thirds of shareholders in attendance, the opposition of NPS early this week spawned concerns.

The No. 2 shareholder in LG Chem with a stake of 10.4 percent said that the chemical giant’s plan would negatively affect shareholder value.

“More than 77 percent of shareholders took part in the meeting, and 83.2 percent of them voted yes. The approval rate is encouragingly high,” an LG Chem official said.

The official estimated that a vast majority of foreign investors agreed with the split.

To chalk up the rapid growth of the promising electric vehicle battery unit, LG Chem announced this July that it will split off the battery business as a wholly-owned subsidiary.

LG Chem is expected to make LG Energy Solution go public in a few years to raise the cash necessary in the global competition in the rechargeable battery business.

Most proxy advisory companies in and outside Korea, including the Institutional Shareholder Service (ISS), supported the plans, but the NPS took a different stance.