LG Chem, KR7051910008

LG Chem stock faces overhang risk as debt tops 29 trillion won

Published on 11/11/2026 at 01:40 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

LG Chem stock faces pressure as stake sales support a strained balance sheet. Petrochemical losses leave less room for earnings recovery.

Balance Sheet Pressure Builds

LG Chem's net debt and near-term obligations are increasing pressure on its financial flexibility.
Further LG Energy Solution stake sales could raise supply concerns around the stock.
Petrochemical losses make stronger cash generation and restructuring increasingly important.

LG Chem, KR7051910008, Illustration mit AI erstellt.

LG Chem's balance-sheet strain is intensifying as the company relies on asset sales to manage rising debt and a weaker petrochemical business. Seoul Economic Daily reported on Tuesday, November 10, that consolidated net debt stood at 29.2025 trillion won at the end of June, up 5.7875 trillion won from a year earlier.

Debt Raises Financing Pressure

Total borrowings reached 40.2892 trillion won, while the debt-to-equity ratio climbed to 129.6 percent from 89.2 percent over the same period and rose to 134.4 percent in the third quarter. Principal and interest on borrowings and lease liabilities due within one year totaled 14.0135 trillion won, compared with cash and cash equivalents of 11.0866 trillion won.

Operating cash flow in the first half of the year fell 64 percent year over year to 1.1677 trillion won, according to the report. Lease liabilities accounted for part of the increase in net debt, but debt excluding those liabilities also rose, pointing to broader pressure on the financial structure.

Stake Sales Could Add Overhang

LG Chem said on October 28 that it would raise about 2.5 trillion won by disposing of 6,535,939 LG Energy Solution shares, or roughly 2.8 percent of the battery subsidiary, through a price return swap. Seoul Economic Daily said the transaction adds to concern that further share sales could increase floating supply and weigh on LG Chem's holding value.

The company previously said it aimed to reduce its stake in LG Energy Solution to about 70 percent by 2030. The report estimated that roughly 15.42 million additional shares could still be sold after the latest transaction, leaving the financing strategy closely tied to market conditions.

Petrochemical Recovery Is Crucial

LG Chem's third-quarter operating profit fell 17.4 percent year over year to 561.2 billion won, while its petrochemical division swung to an operating loss of 175.6 billion won. The company plans to unveil a petrochemical restructuring plan this year and invest in new businesses, but one-off proceeds from stake sales do not replace recurring cash generation.

South Korean equities remain the broader market backdrop for LG Chem stock, as reflected by the KOSPI market.

More news and analyses on LG Chem stock