LG Chem Ltd (051910.KS) shares slid nearly 10% on Monday after General Motors Co said it would recall an extra 73,000 Chevrolet Bolt cars that use the South Korean firm's batteries, months after a similar recall by Hyundai Motor Co (005380.KS).
GM on Friday expanded its recall of Bolt electric vehicles due to fire risk from what it called battery manufacturing defects, saying the recall would cost $1 billion and that it would seek reimbursement from LG.The U.S. automaker said the recall covers vehicles beginning model year 2019 and that it would indefinitely halt Bolt sales. LG Chem said it was working to ensure a smooth recall.
LG Chem, which is preparing an initial public offering for battery unit LG Energy Solution , lost $5 billion in market value with its stock on track for its biggest intraday percentage loss since March 2020. "The market expected that LGES would launch its IPO in September, but with GM's expanded recall, LGES IPO is likely to be delayed for a month or two, because the company needs to reflect the recall cost before finalising the IPO paperwork," said Samsung Securities analyst Cho Hyun-ryul.
GM initially recalled 69,000 Bolt cars in July. Its expanded recall comes about a week after a fire involving a Volkswagen AG
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