KDB, Eximbank, NongHyup to offer $5 billion to LG Chem

Financial Services Commission (FSC) Chairman Eun Sung-soo, center, applauds at LG Science Park in Seoul, Monday, as financial institutions agreed to fund LG Chem for its investments in secondary cell production. From left are NongHyup Bank CEO Lee Dae-hoon, Korea Development Bank Chairman Lee Dong-gull, Eun, LG Chem Vice Chairman Shin Hak-cheol and Export-Import Bank of Korea CEO Bang Moon-kyu. / Courtesy of FSC

By Park Jae-hyuk

The Korea Development Bank, the Export-Import Bank of Korea and NongHyup Bank agreed to loan up to $5 billion to LG Chem over the next five years for the battery maker to invest in its secondary cell production facilities worldwide, the Financial Services Commission (FSC) said Monday.

The financial institutions and the chemical company will also raise a 350 billion won ($294 million) fund to lend money to LG Chem's small and medium-sized subcontractors at prime rates.

These came as part of efforts to enhance the competitiveness of the nation's material, parts and equipment industries, which the government has pursued since Japan's export curbs on Korea.

According to the FSC, the consultative group, which was formed with business lobbies, financial institutions and global investment banks in September for overseas M&As and investments, led the financial institutions to fund LG Chem.

“The agreement between LG Chem and financial institutions today was significant, given that it showed the government and financial sector's will to support the material, parts and equipment industries,” FSC Chairman Eun Sung-soo said during the signing ceremony at LG Science Park in Seoul, Monday.

LG Chem Vice Chairman Shin Hak-cheol said, “Amid the intensifying competition in the global market, we appreciate the financial institutions' swift support that allowed us to make investments at the right time.”

He added that the company will expand its production of secondary cell and improve its technologies to seek ways to contribute to the nation's material, parts and equipment industries and its subcontractors.