LS Marine Solution is conducting a paid-in capital increase worth 280 billion won, with its largest shareholder, LS Cable & System, reportedly leaning toward participating in the capital increase. LS Cable & System had deferred its decision regarding participation in LS Marine Solution's capital increase until after the presidential election.
According to industry sources on the 10th, LS Cable & System is expected to hold a board meeting as early as this week to decide on its participation in LS Marine Solution's capital increase. LS Marine Solution announced its paid-in capital increase of 278.3 billion won on the 26th of last month. LS Cable & System is the largest shareholder of LS Marine Solution, holding 66.75% of the equity. The new shares allocated to LS Cable & System are valued at 185.76525 billion won.
As of the end of last year, LS Cable & System had approximately 220 billion won in cash and cash equivalents, which is similar to the allocation amount for the paid-in capital increase. The company has invested its cash into increasing its stake in its subsidiary, Gaon Cable, to 81.62%.
LS Group is in a situation requiring significant investment for business expansion in batteries, communications, and power infrastructure. In March, Gu Ja-eun, chairman of LS Group, noted that there would be 'no problem' with duplicate listings of subsidiaries, despite facing criticism from investors. Typically, the value of a corporation declines when both the parent and subsidiary are publicly listed. Consequently, the IPOs of subsidiaries such as KOC Electric, LS E-Link, Essex Solutions, and SEABL have been temporarily halted.
Since the announcement of the paid-in capital increase, LS Marine Solution's stock price has risen by about 45% as of the previous day, indicating that the funding rationale has been recognized. LS Marine Solution plans to use the funds raised from the capital increase to build a large cable laying vessel (CLV) capable of handling 13,000 tons, aiming for operation by 2028.
A CLV is a vessel used for laying underwater cables. Currently, there is one CLV, but its size is small, so major projects have been entrusted to foreign companies. The plan is to construct a CLV and obtain contracts in a turnkey manner when laying underwater cables.