LS Tower exterior view
LS Cable announced on Dec. 23 that it has filed a counter-lawsuit to clarify rights and obligations under the investment agreement in relation to the put option (purchase claim right) performance lawsuit filed by private equity fund Keystone Partners regarding LS EV Korea (hereinafter LSEVK).
This counter-lawsuit seeks confirmation of “LS Cable’s non-responsibility for the failed listing” and the resulting “non-existence of put option debt” during the process of attracting investment for LSEVK and pursuing its listing.
Keystone Partners has been investing in LS Cable’s electric vehicle parts business since 2020 and has held a 16% stake in LSEVK.
The investment agreement included obligations to cooperate in listing promotion, put options exercisable under limited circumstances in case of listing failure (IRR 15%), and LS Cable’s right of first refusal corresponding to Keystone Partners’ tag-along rights (IRR 4%).
LSEVK conducted preliminary review targeting a KOSDAQ listing in September 2024, but the listing process was suspended when the application was rejected due to Keystone Partners’ failure to fulfill its holding commitment obligation during the review process.
In October, Keystone Partners filed a put option performance lawsuit against LS Cable for approximately 75.9 billion won, applying a compound annual interest rate of 15% to the investment principal of 40 billion won. However, LS Cable maintains that this does not meet the requirements for put option exercise.
LS Cable stated, “Even though the expected public offering price fell short of the qualified listing standards, we pursued the listing at Keystone Partners’ request, so there was no intentional act or gross negligence on LS Cable’s part,” and “The responsibility for the failed listing lies with Keystone Partners, who failed to fulfill their holding commitment obligation.”
Furthermore, LS Cable exercised its right of first refusal worth 48.9 billion won applying IRR 4% in early December, and with Keystone Partners’ acceptance, the sale and purchase agreement regarding Keystone Partners’ LSEVK stake was completed. Therefore, LS Cable maintains that there is no put option payment obligation for the relevant stake.
LS Cable stated that it will respond on principle because demanding excessive profits without legal basis, despite the responsibility for the failed listing lying with the investor, places a significant burden on corporate value and governance structure.
