LS pushed back against controversy over its plan to list its subsidiary Essex Solutions in Korea, saying, "This listing is not a split listing but a relisting in Korea of an overseas asset." It added that a listing is necessary to respond to the power supercycle.
On the 13th, LS issued a statement on the Essex Solutions listing, saying, "This is not a split listing (a physical division) that dilutes the value of the parent company, but rather the nature of a 'relisting' or 'inbound listing' that introduces an overseas asset acquired in the past to Korea's capital market and has its value evaluated at market prices."
LS invested about 1 trillion won in 2008 to acquire Superior Essex (SPSX). In 2024, it acquired the entire equity held by Furukawa Electric in Essex Furukawa Magnet Wire, a joint venture between Superior Essex and Japan's Furukawa Electric. It then launched Essex Solutions through vertical integration of winding wire subsidiaries within the group.
As reasons for the listing, the company said, "Large-scale facility investment is needed for the specialty winding wire business," adding, "This is not a simple expansion but an investment for survival, and we made this decision to avoid missing the golden time to respond to the power supercycle."
Recently, Essex Solutions has seen a surge in orders for specialty winding wire for transformers, with about four to five years from order to delivery. The company added that more than 500 billion won in investment is needed to expand specialty winding wire manufacturing facilities. If 500 billion won is raised through the listing, it plans to invest in U.S. facilities.
LS said, "One of the main reasons LS shares were undervalued in the past was the excessive payment guarantees and funding burdens for subsidiaries," adding, "This listing is a decision to break this chain of dependence on the parent company, allowing LS to shed additional payment guarantee burdens."
It added, "This listing is not siphoning off the parent company's wealth, but a 'value-enhancing' form that grows the subsidiary's size and lifts the parent company's equity value together."
Meanwhile, in Aug. last year LS announced it would cancel 1 million treasury shares, or 3.1% of total shares outstanding, and completed cancellation of 500,000 shares; it plans to cancel the remaining 500,000 shares in the first quarter of this year. Following the first corporate briefing last year, it will hold a second briefing this month to announce additional shareholder returns and value-up policies.