S. Korea's LG Chem shares dive on GM recall

Shares of South Korea's LG Chem sank nearly 10% on Monday in the wake of a recall involving batteries it makes for General Motors.

It's a huge blow for LG Chem, currently preparing an IPO for the unit that makes the batteries, which are used in electric vehicles.

Analysts now expect the LG Energy Solutions listing to be delayed.

General Motors announced last week it would recall an extra 73,000 Chevrolet Bolt electric vehicles, citing what it called battery manufacturing defects.

That came about a week after a fire involving a Volkswagen vehicle carrying one of the batteries.

The U.S. automaker added the recall would cost $1 billion and that it would seek reimbursement from LG.

GM's recall comes six months after a similar move by Hyundai, also involving LG batteries.

GM said its recall covers vehicles beginning in model year 2019 and that it would indefinitely halt sales of the Chevy Bolt.

Meanwhile, LG Chem said it was working to ensure a smooth recall.

Batteries are a massive component of earnings by the wider LG Group.

LG Chem earned 40% of its operating profit from batteries, including EV batteries, from April to June.

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