LG Chem shareholders on Friday approved a plan to separate its battery business into a new company, paving the way for a potential public listing to finance expansion. 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 is the world’s top battery maker supplying Tesla Inc and General Motors Co.

“While the battery business is expected to post enormous growth, competition is intensifying from not only other battery makers but automakers,” LG Chem Chief Executive Officer Hak Cheol Shin told a shareholder meeting in Seoul.

“We have decided to separate our battery business to better optimize our management in today’s fast-changing market environment.”
More than 82% of LG Chem shareholders who attended the meeting voted in favor of the plan, the source said. LG Chem declined to comment.

“With the split-off of the battery business, we can use various fundraising options to expand investments at the right time, and based on this we can secure a clear global No.1 position by widening the gap with rivals,” LG Chem Chief Financial Official Cha Dong-Seok said.

The company’s growth was constrained by rising debts as a result of a sharp increase in capacity investments, he added.

Shares of LG Chem closed down 6.1% versus a 2.6% fall in the benchmark KOSPI.

Asked about selling stakes to strategic investors in the run-up to the IPO, Shin told the company was reviewing various options.

Hwang Yu-sik, an analyst at NH Investment & Securities, said that as a standalone company the battery business would be able to better raise money including through an IPO to expand its production capacity.

South Korea’s National Pension Service (NPS), LG Chem’s No.2 shareholder with a 9.96% stake, voted against the split-off plan having earlier raised concerns about damage to shareholder value.

Source:Reuters

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A judge in Nevada has dismissed a defamation case by a former Tesla employee, who claimed the company spread a false rumor about him after he admitted leaking internal company information to a reporter in 2018.

Tesla argues in court documents that former employee Martin Tripp violated trade secrets and computer crime laws when he told a Business Insider reporter that Tesla was wasting a significant amount of raw materials during the production of its Model 3.

Tesla identified Tripp as the source of the leaked information, which Tripp later confirmed. He was fired, and Tesla filed a lawsuit claiming he had “unlawfully hacked the company’s confidential and trade secret information.” Tesla CEO Elon Musk emailed Tesla, staff, telling them an employee had tried to “sabotage” company operations.

Musk then reportedly emailed a reporter at The Guardian telling them a tipster had contacted Tesla to say that Tripp might “come back and shoot people,” at the Nevada Gigafactory. The local sheriff determined the threat was not real, but Tesla issued a press release which was picked up by several media outlets. Tripp later counter-sued Tesla for defamation.

In her ruling, Judge Miranda Du dismissed Tripp’s defamation claim but refused to dismiss Tesla’s charge that Tripp violated computer crime law in Nevada. “Tripp had a duty not to disclose Tesla’s confidential information,” Du wrote, adding that Tripp knew he was not authorized to share the information with a reporter. “A rational trier of fact could reasonably find that Tripp acted in conscious disregard of Tesla’s rights.”

The case can now move forward to trial.

Source: TheVerge

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VW NOT SEEKING A DEAL WITH TESLA, CEO DIESS SAYS

Tesla Inc plans to add at least one new service center every week in 2021, Electrek reported on Thursday, citing a source familiar with the matter.

The electric carmaker has been expanding its network of service centers and Superchargers to keep up with its growing fleet.

Last week, analysts at Brokerage RBC noted that Tesla’s investment in service and quality has not been enough to keep up with its increasing sales and has the potential to damage the brand.

“Service could be particularly important as Tesla continues to try to expand outside its core market.”

The company, which has repeatedly said that it needs to expand its service center locations, operates 466 service centers around the world, according to Electrek.

Tesla could not immediately be reached for comment.

Source: Reuters

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