Sale to Honda Development & Manufacturing of America
Proceeds Expected in First Half of Next Year
Aimed at Enhancing JV Operational Efficiency
On December 24, LG Energy Solution announced through a public disclosure that it will sell the building assets of its U.S. battery plant, which it owns through a local joint venture (JV) with Japanese automaker Honda, to Honda's U.S. subsidiary.
On December 24, LG Energy Solution disclosed that it will sell the building assets of L-H Battery Company, located in Ohio, United States, to Honda Development & Manufacturing of America, Honda's U.S. development and manufacturing subsidiary.
The disclosed amount, based on the asset value as of the end of November, is 4.2243 trillion won, and the final sale price may vary depending on future due diligence and exchange rates. This represents 7.0% of the company's total assets.
The purpose of the sale is to enhance the operational efficiency of the joint venture, and the proceeds are expected to be received in the first half of next year.
LG Energy Solution explained that this building sale is a strategic measure to improve overall capital efficiency and to respond more flexibly to short-term market volatility.
With the prolonged slowdown in battery market demand due to the electric vehicle chasm (a temporary stagnation in demand), the company aims to increase liquidity and enhance the operational efficiency of the joint venture.
In particular, amid the current slowdown in the North American electric vehicle (EV) market caused by the electric vehicle chasm and increased policy uncertainties such as the abolition of U.S. EV subsidies, the company plans to boost liquidity and use it as operating funds for the JV, rather than tying up large amounts of capital in facility assets.
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