LG India worried about competition from parent Company
LG Electronics India is concerned that its South Korean parent may in the future start separate businesses in India which could compete with the former since there is no exclusivity arrangement between the two of them.
India's largest home appliances maker highlighted the apprehensions in its draft prospectus filed with the market regulator on Friday for a planned initial public offering (IPO). The mega public issue will see LG Electronics sell a 15% stake in the Indian subsidiary to raise around ₹15,000 crore, potentially making it India's fifth-largest IPO after Life Insurance Corporation, Hyundai Motor, Paytm and Coal India.
«While our promoter is currently not engaged in businesses that compete with ours in India, the promoter may in the future engage in businesses that compete with ours because we do not have any exclusivity arrangement with them,» the company said in the draft prospectus. «This may give rise to conflicts of interest, which may adversely affect our business, financial condition and results of operations.»
LG Electronics has floated an indirect wholly-owned subsidiary, Hi-M Solutek India, which specialises in LG commercial air conditioner service and maintenance. These services include the provision of system air conditioner construction materials, equipment integrated service and maintenance, building energy diagnosis and operation services, and special facility engineering services.
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