LG Chem: Considering Higher Dividend Payout Using Sale Proceeds from LGES

• LG Chem is considering on paying higher dividends using sale proceeds from LG Energy Solution.

• This breaks the company’s principle of using only ordinary income from operating activities as a source for dividends.

• If indeed LG Chem goes ahead with this plan, this would be as a result of heightened demands from major activist investors including Palliser Capital.

Palliser and Other Major Investors Pressuring Higher Shareholder Returns

Palliser Capital and other major investors are pressuring LG Chem to provide higher shareholder returns. However, Palliser has emphasized higher share buybacks which are highly accretive, rather than dividends. According to Palliser, share buybacks and cancellations represent a low-risk capital allocation option at current deep valuation discount levels.

Source: Palliser Capital