LG Chem's $1.69B swap on LG Energy Solution shares pays off as price climbs
What's the deal? LG ChemDealroom has a profile for this one. Try Dealroom → raised US$1.68B in October 2025 through a Price Return Swap (PRS), pledging 5.75 million common shares of subsidiary LG Energy SolutionDealroom has a profile for this one. Try Dealroom → to five securities firms. The three-year contract priced the shares at a reference of US$291.3, the September 30, 2025 close.
Who's involved? The deal spread across Korea Investment & SecuritiesDealroom has a profile for this one. Try Dealroom →, NH Investment & SecuritiesDealroom has a profile for this one. Try Dealroom →, Shinhan Investment CorpDealroom has a profile for this one. Try Dealroom →, KB SecuritiesDealroom has a profile for this one. Try Dealroom →, and Daishin SecuritiesDealroom has a profile for this one. Try Dealroom →. Under a PRS, a company hands shares to securities firms as collateral for cash, pays interest-like fees, and settles any price difference later.
Why PRS over a sale? LG Chem chose the swap instead of a block deal to ease tax and financial burdens. The contract trimmed its LG Energy Solution stake from 81.8% to 79.4%, dropping below the 80% threshold that triggers wider application of the OECD-led global minimum tax.
Why now? LG Chem's debt-to-equity ratio climbed from 81.5% at the end of March 2022 to 110.7% at the end of June 2025, as its core petrochemical business struggled against China-driven oversupply and capital spending rose. It plans to use the PRS proceeds to repay debt tied to new businesses such as advanced materials and bio.
How is it playing out? A year on, the bet is in a gain zone. LG Energy Solution traded at US$301.8 — US$10.5 above the reference price — putting LG Chem's valuation settlement profit at about US$60.3M across the 5.75 million shares.
The signal: At $1.69 billion, this ranks among the largest post-IPO debt deals in South Korea, in the 99th percentile of 83 such rounds. LG GroupDealroom has a profile for this one. Try Dealroom → kept its PRS exposure well below SK GroupDealroom has a profile for this one. Try Dealroom →'s US$6.12B and Hanwha GroupDealroom has a profile for this one. Try Dealroom →'s US$3.02B, and backed it with a domestically listed subsidiary that has clear market pricing — lowering valuation and disposal risk relative to peers.
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Image credit: Nick Bramhall
