LG Display Corrects Debt Guarantee Disclosure for Vietnam Subsidiary – KRW 1.87 Trillion Guarantee for OLED Expansion with Limited Shareholder Impact
LG Display has corrected its debt guarantee decision for its subsidiary LG Display Vietnam Haiphong Co., Ltd., originally filed on April 27, 2022, by adding Banco de Sabadell as a creditor
The guarantee amount is KRW 1,870.65 billion (USD 1.5 billion at KRW 1,247.10/USD), equivalent to 12.67% of the company's consolidated equity (KRW 14,762.5 billion as of end-2021)
The guarantee supports the subsidiary's borrowing of USD 1.5 billion for OLED business expansion, with a guarantee period from June 28, 2022 to July 31, 2029
LG Display expects to receive approximately USD 24.51 million (about KRW 30.6 billion) in guarantee fees over the period, subject to market conditions
The decision was approved by the board on April 26, 2022, with three outside directors attending and one absent; all three audit committee members (outside directors) participated
The subsidiary's key financials for 2021: total assets KRW 4.09 trillion, total liabilities KRW 3.15 trillion, equity KRW 944.8 billion, and net profit of KRW 270.4 billion, indicating a sound financial position
Existing debt guarantee balances (excluding this new guarantee) total KRW 1.1189 trillion, and including this new guarantee, total guarantees would increase to approximately KRW 2.9896 trillion
[AI Summary]This correction purely adds a creditor to an existing debt guarantee arrangement for LG Display's subsidiary, aimed at funding OLED expansion. Given the subsidiary's healthy financials and the expansion purpose, the short-term stock impact is neutral. However, the total guarantee balance rises to 20.3% of equity, warranting monitoring of future leverage risk.
KOSPI Filing Information
Filing: [Correction of Description] Decision on Debt Guarantee for Others