LG Chem shareholders approve plan to split off battery business

(Reuters) – LG Chem shareholders approved the company’s proposal to separate its battery business into a new company, a source familiar with the matter told Reuters on Friday.

The decision paves the way for the battery business, a supplier for Tesla Inc and General Motors Co, to potentially raise funds and go public to finance its high-cost capacity expansion.

More than 82% of LG Chem shareholders who attended the meeting voted in favour of the plan, the source said. LG Chem declined to comment.

The unit, which will be launched on Dec. 1, will first become a wholly-owned subsidiary tentatively named LG Energy Solutions, and then up to 30% of the company’s shares may be listed in an initial offering in about a year.

LG Chem’s stock price fell 2.8%.

Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Himani Sarkar and Stephen Coates