LG Chem to Sell KRW 2.5 Trillion Stake in LG Energy Solution, Cancel KRW 300 Billion in Treasury Shares

Secure Liquidity Through PRS Contract
Use Proceeds to Repay Borrowings and Invest in Future Growth
Pursue KRW 400 Billion in Shareholder Returns

LG Chem will secure about KRW 2.5 trillion in liquidity by using its stake in subsidiary LG Energy Solution and will acquire and cancel KRW 300 billion worth of treasury shares.

LG Chem CI.

LG Chem disclosed on October 28 that it plans to enter into a price return swap (PRS) contract with LG Energy Solution shares as the underlying asset.

The underlying assets for the contract are 6,535,939 common shares of LG Energy Solution, with a reference price of KRW 382,500 per share, the closing price on October 27. The contract term is two years, and the proceeds are scheduled to be received on November 27.

LG Chem plans to use the funds to repay borrowings and invest in future growth. It will also allocate KRW 400 billion, or about 20% of the after-tax cash proceeds, to shareholder returns. Of this amount, KRW 300 billion will be used to acquire and cancel treasury common and preferred shares over the next six months, while the remainder will go toward the dividend for fiscal 2026.

This is the first time LG Chem has pursued shareholder returns through treasury share acquisitions and cancellations, in addition to dividends.

Once the transaction is completed, LG Chem's stake in LG Energy Solution will fall from 79.38% to about 76.6%.

Last year, LG Chem also sold a stake in LG Energy Solution worth about KRW 2 trillion and used about 10% of the after-tax cash proceeds for shareholder returns.

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