Essex Solutions, an affiliate of LS Group, will file a preliminary review on the 7th for a listing on the Korea Exchange's main board (KOSPI). As Essex Solutions moves in earnest toward a listing, initial public offerings (IPOs) by large corporate subsidiaries, which had stalled over duplicate listing issues, are expected to resume.
According to the investment banking (IB) industry on the 7th, Essex Solutions will file for a preliminary review with the Korea Exchange (KRX) for a KOSPI listing at about 4 p.m. that day. The company is said to have coordinated the timing of the filing after ramping up prior consultations with the Korea Exchange early last month. The lead underwriters are Mirae Asset Securities and Korea Investment & Securities.
Essex Solutions is cited as the No. 1 corporation by market share in the global winding (magnet wire) market. It was founded in 1930 after the wire assembly division of U.S. automaker Ford was spun off. Its main products are special windings for electric vehicles, and LS Group invested about 1 trillion won in 2008 to bring it in as an affiliate. Windings are essential parts that are wound in coils on electric vehicle drive motors and convert electrical energy into kinetic energy.
Essex Solutions began preparing for a listing early this year with the goal of raising funds for production facility expansion and other purposes. After selecting Mirae Asset Securities and Korea Investment & Securities as joint lead managers in March, it planned to file for a preliminary review in September and list within the year.
However, controversy over duplicate listings by large corporate affiliates became a headwind. A duplicate listing is generally understood as a case where a subsidiary lists while the parent company is already listed. In addition to President Lee Jae-myung having expressed a critical view of duplicate listings even before being elected, the ruling party set a policy to push a "split listing ban law," freezing the IPO market.
Essex Solutions is a great-grandchild company of LS, the group's holding company. It has a governance structure of "LS→LS I&D→Superior Essex (SPSX)→Essex Solutions." In prior consultations with the Korea Exchange (KRX), Essex Solutions emphasized that it was not established through a physical division but incorporated as an affiliate by acquiring another corporation, and that its business domain differs from that of the parent company.
The result of Essex Solutions' preliminary listing review is expected early next year. Considering the Korea Exchange (KRX) review guidelines, the preliminary review result for a foreign corporation must be notified within 65 business days. If the preliminary review is passed, the company will submit a securities registration statement to the Financial Supervisory Service, then go through institutional investor book-building, a public subscription and allocation of the offering shares to enter the market.