LG Energy Solution has converted its entire US$250 million convertible note into equity in Liontown, acquiring an 8% stake and simplifying the lithium miner’s capital structure.
- LG Energy Solution converts US$250 million convertible note into approximately 239 million shares
- Conversion price adjusted to A$1.62 per share following prior capital raising
- LG Energy Solution to hold about 8% of Liontown’s issued share capital post-conversion
- Elimination of convertible note reduces future interest costs and simplifies capital structure
- Liontown retains only A$300 million Ford facility and A$15 million interest-free loan as debt
Strategic Equity Conversion
Liontown Limited (ASX – LTR) has announced a significant development in its capital structure with LG Energy Solution electing to convert its entire US$250 million convertible note holding into equity. This move will see LG Energy Solution become a substantial shareholder, holding approximately 8% of Liontown’s issued shares. The conversion is expected to be completed within five business days, marking a pivotal moment for the lithium miner.
Financial and Structural Impact
The conversion price was adjusted to A$1.62 per share, down from the original A$1.80, reflecting changes following Liontown’s August 2025 capital raising. By converting the note, Liontown eliminates the convertible debt and the associated future interest obligations, which simplifies its capital structure and strengthens its balance sheet. Post-conversion, the company’s debt profile will be limited to a A$300 million Ford facility and a A$15 million interest-free loan from the Western Australian State Government.
Strategic Partnership Deepens
Liontown’s Managing Director and CEO, Tony Ottaviano, highlighted the strategic significance of this conversion. LG Energy Solution is not only a cornerstone shareholder but also a long-term offtake customer, reinforcing a partnership that is critical as Liontown scales production at its Kathleen Valley lithium project. This alignment of interests is expected to provide Liontown with enhanced financial firepower and operational support as it advances its mission to supply responsibly sourced lithium for the global energy transition.
Looking Ahead
With A$390 million cash on hand as of 31 December 2025 and a simplified capital structure, Liontown is well-positioned to focus on disciplined capital allocation and shareholder returns. The elimination of the convertible note’s interest costs will improve financial flexibility, potentially accelerating growth initiatives and operational execution.
Bottom Line?
LG Energy Solution’s equity conversion not only strengthens Liontown’s balance sheet but also signals growing confidence in its lithium production future.
Questions in the middle?
- How will the increased equity stake influence LG Energy Solution’s role in Liontown’s strategic decisions?
- What impact will the simplified capital structure have on Liontown’s ability to fund expansion projects?
- Could this conversion trigger further partnerships or capital raises in the near term?