'LG EnSol Minimum Moderate Success'... Employees' Employee Stock Subscription Rate Exceeds 90%

Taking a Loan and Selling Stocks for Employee Stock Subscription
High Expectations for Stock Price Increase Even If Not 'Ttasang'

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[Asia Economy Reporter Hwang Yoon-joo] Expectations for an initial public offering (IPO) are growing within LG Energy Solution. It is interpreted that employees are flocking to subscribe to employee stock ownership plans (ESOP) because they believe profit realization is certain despite the sluggish domestic stock market.

According to industry sources on the 11th, LG Energy Solution employees were allocated between approximately 600 and 1,400 shares of ESOP per person.

Under current law, when a company goes public, 20% of the newly issued shares must be preferentially allocated to ESOP. In the case of LG Energy Solution, out of the total public offering volume of 42.5 million shares, 8.5 million shares are designated for ESOP.

The total number of LG Energy Solution employees is about 9,000, and the ESOP subscription rate is reported to exceed 90%.

Employees are said to be busy raising subscription funds, including taking out stock-backed loans. One employee said, "I sold all the stocks I held and even took out a loan to prepare the subscription funds," adding, "Although a 'ttasang' (when the opening price on the first day of listing is double the IPO price and then hits the upper limit) is difficult, I decided to invest thinking I could achieve at least a 30% return."

If LG Energy Solution succeeds in a 'ttasang' after listing, employees allocated ESOP shares could earn profits amounting to several hundred million won.

In other words, if LG Energy Solution succeeds in demand forecasting before listing and the IPO price is set at the top of the desired range at 300,000 won, and if the stock price doubles at the opening price and then hits the upper limit, the stock price would reach 780,000 won. If an employee received 1,000 shares, they would gain 480 million won in profit. Considering that the average annual salary per person at LG Energy Solution is 66 million won (based on the securities registration statement), this amount corresponds to seven times the annual salary.

However, ESOP shares cannot be sold for one year after listing, so the stock price trend after one year is more important for employees.