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Londian Wason plans US IPO in 1H24, SK advised by UBS for early exit

Londian Wason Energy Tech, a Shenzhen, China-based electric vehicle battery part copper foil manufacturer, aims to launch an initial public offering (IPO) in the US in the first half of 2024, sources familiar with the situation said.

The company is expected to offer primary shares mostly for the listing, while the discussions continue to iron out details of the value and size, the sources said.

The second largest shareholder SK Inc [KRX:034730], as previously reported, seeks to exit before the IPO, while Londian Wason doesn’t plan to arrange a pre-IPO round for any new investor, they said.

The South Korean strategic investor is being advised by UBS for the stake sale and has sounded out potential global and Chinese financial investors, two of the sources said.

The potential buyers, however, are asking for a deeper valuation discount, undermining SK’s chances of maximizing returns from an exit before the IPO, one of the sources said. SK alternatively could hold the shares until the IPO, he added.

Londian Wason has hired Citigroup and Goldman Sachs to prepare for a listing in the US as soon as 2024, a newswire reported on 28 September. Local media reported earlier in August that SK Inc wants to sell its entire 30% stake, worth KRW 1.5trn (USD 1.1bn), valuing Londian Wason at KRW 4trn-KRW 5trn (USD 3.1bn to USD 3.6bn).

SK invested USD 240m in Londian Wason in November 2018 at an enterprise value of USD 800m, according to Mergermarket data. SK made a follow-on investment of USD 250m in 2019.

The EV transition has started slowing down with sluggish demand globally, according to a third source. Nevertheless, it is still a growing sector and Londian Wason’s business is anchored in China, the world’s largest EV market which has sufficient demand for its products, said the source. The growth prospect remains strong regardless of the US’ stricter stance on Chinese tech or import products, he added. Unlike semiconductors, the EV industry is also relatively safe for Chinese companies with business in the US, said a sector advisor.

Londian Wason and SK declined to comment. UBS did not return a request for comment by the time of publication.

Londian Wason is the largest copper foil materials producer in China and the largest shareholder is D&R Group, a Chinese investment holding firm, according to its website. Its top customers include global battery producers including CATL [SHE: 300750], BYD [SHE: 002594], LG Energy Solution [KRX: 373220], Samsung SDI [KRX: 006400] and Panasonic, it shows.

by Kate Kim in Seoul and Jennifer Zhang in Shanghai