LG Display to borrow ￦1T from LG Electronics to fund facility investment

[LG DISPLAY]

LG Display agreed to borrow up to 1 trillion won ($772.1 million) from LG Electronics to help fund organic light-emitting diode (OLED) display facility investments.

In the first phase of the deal, the panel maker, 37.9 percent owned by LG Electronics, will borrow 650 billion won on March 30. The remaining 350 billion won will be borrowed at an unspecified date in the future.

The board of the two companies approved the financial arrangement on Tuesday, according to an electronic disclosure.

The announcement pushed up the shares of LG Display by 8.9 percent to close at 16,270 won, while LG Electronics lost 1.5 percent to close at 111,800 won on Tuesday.

LG Display on Monday explained in its regulatory filing that its long-term borrowed money will be used to “enhance the competitiveness of OLED and secure operating funds.”

The borrowing period will be three years from Thursday, until March 30, 2026. The interest rate is 6.06 percent with a two-year grace period and a one-year installment repayment condition.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]