Public Disclosure

11/23/2001

Demerger and Holding Company Structure

Under the Korean Securities & Exchange Law on Public Disclosure Article 69, we publicly state the following resolution on split-off(surviving after split-off) for your reference.


1. Reason and objectives
- Improve transparency of corporate governance and concentrate investment to restructuring and the core businesses
- Execute selection-and-focus strategy and advance business level by focusing resources on the core businesses
- Maximize shareholder value by profit generation and value increase in operating company


2. Method
- Split-Off
- According to the articles 530-2 through 530-12 of the Business Law, LG Electronics Inc. is separating its electronic and telecom equipment businesses to create a new company by means of split-off by which shareholders of split-off (parent) company become shareholders of both parent company and new company. (Split-off company survives and the new company will be listed)


3. Surviving company after split-off
- Company name: LG Electronics Inc. LG Electronics Investment, Ltd. (LGEI)
- Major business: Investment
- Paid-in capital after split-off (won): KRW 247 billion
- Outstanding number of shares after split-off (no.): 17,421,362 (including preferred shares)
- Split-off ratio: 0.10 per share
- Listing after split-off: Yes


4. Company to be newly created
- Company name: LG Electronics Inc. (LGE)
- Major business: Manufacture of electronics and telecommunications devices
- Paid-in capital (won): KRW 784 billion
- Outstanding number of shares (no.): 156,792,255 (including preferred shares)
- Split-off ratio: 0.90 per share


5. Asset allocation
- LG Electronics Investment, Ltd. will hold most of the investment assets, including telecom services
- LG Electronics Inc. will hold investment assets directly related to the core business and overseas subsidiaries
- Value of the assets to be transferred: Book value as of March 30. 2002, audited by CPA


6. Schedule
- Approval date of extraordinary shareholders' meeting: December 28. 2001
- Effective date of split-off: April 1, 2002


7. Resolution date of the board directors: November 15, 2001
- Outside directors present
- Auditors present


8. Other
- Tender offer is an option to secure the 30% ownership requirement enacted by the Fair Trade Act in Korea. Other alternative methods will also be reviewed. (Under the Fair Trade Act, holding companies must hold 30% or more (in case of listed companies) of affiliates shares within 2 years)

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