[Alpha Biz= Kim Jisun] LG Display has repaid a ₩1 trillion (approximately USD 720 million) loan from LG Electronics 10 months ahead of schedule, signaling growing confidence in its return to profitability and a strong commitment to improving its financial structure.
On June 5, LG Display announced in a regulatory filing that it had fully repaid the loan originally borrowed in March 2023. The loan carried an interest rate of 6.06%, which was relatively high compared to the company's other long-term debt, which ranged from 2.13% to 6.72% as of March 2024.
Industry observers say the early repayment was enabled by proceeds from the sale of LG Display’s LCD plant in China last year. The company is using these proceeds to pay down high-interest debt as part of a broader financial strategy.
By reducing its debt load, LG Display expects to save hundreds of billions of Korean won in interest expenses and further strengthen its financial position. The company’s interest expenses jumped significantly after borrowing the ₩1 trillion from LG Electronics, reaching ₩7.2 trillion in 2023 and projected to rise to ₩9.1 trillion in 2024. However, in Q1 2024, interest expenses dropped 7.9% year-over-year to ₩201 billion.
The early loan repayment underscores LG Display’s confidence in a financial turnaround, following years of cost-cutting and strategic restructuring.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
