이 기사는 2022년 05월 06일 08:13 thebell 에 표출된 기사입니다.

South Korea's LG CNS has started a process to select firms for roles on its planned initial public offering (IPO), which is expected to pave the way for Macquarie Group’s exit from the company.

LG CNS recently issued request for proposals to domestic major brokerage firms including KB Securities, Mirae Asset Securities, Korea Investment & Securities, Daishin Securities and Shinhan Financial Investment and foreign brokers including Morgan Stanley, according to industry sources on Tuesday.

LG CNS started to prepare its listing last year to help its financial investor exit the company.

Macquarie bought a 35% stake in LG CNS from LG Corp, the holding company of LG Group, through its special purpose vehicle Crystal Korea Ltd in 2019. Through the transaction, LG Corp reduced its stake in LG CNS from 84.95% to 49.95% to avoid toughened antitrust rules on intercompany transactions.

Macquarie's stake purchase was made on the condition that it should exit the investment through an IPO of LG CNS or other methods within the next five years.

LG CNS shares recently traded between 70,000 won and 80,000 won in the South Korean over-the-counter market, which puts the company valuation at between 6 trillion won and 7 trillion won. If LG CNS lists its shares based on its valuation in the over-the-counter market, Macquarie expected to secure 2 trillion-2.5 trillion won through the exit.

Yet, analysts believe that Macquarie won’t be able to sell its entire shares in the company in the IPO as it may make the listing less attractive to investors.

Last year, there was tepid response to deals where more than 40% of the total offering was sold by existing shareholders – including IPOs of Hyundai Engineering and Dae Myoung Energy, which ultimately pulled their offerings.

LG CNS said nothing has been finalized yet about its planned IPO. (Reporting by Yoon-shin Choi)