LS Considers Special Allocation of Essex Solutions IPO Shares to Parent Company Shareholders

LS Group is pursuing an initial public offering (IPO) for its U.S.-based specialty winding wire manufacturing subsidiary, Essex Solutions, and is considering an unprecedented listing plan that would grant priority allocation of shares to shareholders of its holding company, LS Corp.

According to industry sources on January 15, LS is currently in discussions with relevant ministries and agencies regarding a special allocation plan that would allow only LS Corp. shareholders to participate in a separate subscription process during Essex Solutions’ IPO, in addition to the general public offering. If this plan is finalized, LS Corp. shareholders will have the opportunity to secure shares in Essex Solutions without having to compete in the highly competitive general subscription process.

In the domestic stock market, there have been ongoing controversies over “double counting” and infringement of shareholder rights, as parent company stock prices tend to fall or parent company shareholders are excluded from the benefits of subsidiary growth when subsidiaries go public. LS’s new approach is seen as a move to enhance shareholder value by allowing parent company shareholders to directly choose to acquire shares in the subsidiary.

LS has formed a task force with its IPO underwriters-Mirae Asset Securities, Korea Investment & Securities, Samsung Securities, and NH Investment & Securities-to prepare the necessary systems. Within this month, LS plans to hold a “second corporate briefing session,” where it will announce specific subscription methods as well as additional shareholder return policies, including dividends and value-up initiatives.

Essex Solutions manufactures specialty winding wires used in electric vehicle motors and transformers, and is considered a beneficiary of the so-called “power supercycle,” as demand for power equipment surges. Through this IPO, LS aims to raise approximately 500 billion won to invest in local facilities in the United States.

Choi Changhee, CEO of Essex Solutions, expressed confidence at the first corporate briefing session, stating, “By 2030, the company’s value will grow more than threefold compared to today.”

An LS official stated, “We are preparing a plan that will allow parent company shareholders to enjoy tangible benefits, breaking away from the conventional practice of excluding them during subsidiary listings,” adding, “This will serve as an opportunity to maximize shareholder value for both LS and its subsidiary.”