Blog

DEEP RESEARCH · LS MARINE SOLUTION/LS CABLE

LS Cable’s KRW 400bn Exchangeable Bond and LS Marine Solution: Opportunity and Risk in the 2028 Turnkey Strategy

A subsea-cable supercycle analysis covering the U.S. HVDC plant, the new cable-laying vessel, and overhang risk

Written: 2025-09-03 · Exchangeable bond and subsea-cable value-chain analysis · Original Naver Blog post

Investment decisions are your own responsibility. This material is research and is not a recommendation to buy or sell.

0. Bottom line first

LS Cable’s KRW 400 billion exchangeable bond is not just financing. I read it as a strategic bet to combine the U.S. HVDC subsea-cable plant with LS Marine Solution’s new cable-laying vessel and become a turnkey player in 2028. For LS Marine Solution shareholders, however, the key burden is overhang: potential selling volume equal to about 33% of its roughly KRW 1.2 trillion market capitalization.

Official fact: The source post includes an audio file: MP3 analysis of LS Cable’s KRW 400bn EB

Source image 1 related to LS Cable exchangeable bond and subsea-cable strategy

1. Structure of the KRW 400bn exchangeable bond

Official fact: LS Cable is pursuing a KRW 400 billion exchangeable bond. Bondholders have the right, under set conditions, to receive shares of LS Marine Solution held by LS Cable instead of principal and interest at maturity.

Official fact: The source states that KRW 400 billion equals about 33% of LS Marine Solution’s roughly KRW 1.2 trillion market capitalization. It also states that LS Cable owns about 66.75% to 67.82% of LS Marine Solution and is the controlling shareholder.

Interpretation: The EB lets LS Cable raise low-cost capital without immediately selling subsidiary shares through a block deal. Until exchange, LS Cable keeps voting rights and control, while investors receive an option to participate in future LS Marine Solution upside.

How the EB worksUsing LS Marine Solution shares held by LS Cable
LS CableRaises KRW 400bn
InvestorsBond plus exchange right
Exchange assetLS Marine Solution shares
RiskPossible overhang
Low-cost financing and potential future selling pressure appear at the same time.

2. Capital allocation: U.S. plant and new CLV

Official fact: LS Cable is building an HVDC subsea-cable plant in Chesapeake, Virginia with an investment of about KRW 1 trillion, or $681 million. The site is about 120,000 pyeong and includes a planned 201m VCV tower described as the world’s tallest.

Official fact: The source says LS GreenLink, LS Cable’s U.S. subsidiary, secured a $99.06 million, roughly KRW 136.5 billion, investment tax credit from the U.S. Department of Energy. The plant started construction in April 2025, targets completion in 3Q27, and mass production in 1Q28.

Official fact: LS Marine Solution is investing KRW 345.8 billion to build a new cable-laying vessel at Tersan Shipyard in Turkiye. The vessel has 13,000 tons of cable-loading capacity, described as Asia’s largest and among the global top five.

Source image 2 related to LS Cable U.S. HVDC plant and LS Marine Solution vessel investment
Investment axisSource numbersStrategic meaning
Chesapeake HVDC plantAbout KRW 1tn, $681mn, 120,000 pyeong, 201m VCV, planned 1Q28 mass productionNorth American local manufacturing and response to U.S. supply shortage
New LS Marine Solution CLVKRW 345.8bn, 13,000-ton class, planned 1H28 operationOcean-crossing capability and global large-project installation capacity
FinancingKRW 400bn EB, KRW 417.8bn rights issue, LS Cable’s KRW 290.9bn CP participationPossible refinancing of short-term CP into longer-term, lower-cost EB funding

3. The 2028 turnkey strategy

Interpretation: The key is not to view manufacturing and installation separately. LS Cable’s manufacturing and LS Marine Solution’s installation need to be read as one turnkey solution. The 1Q28 production start for the U.S. plant and the 1H28 operation start for the new CLV are the center of this strategy.

LS Group subsea-cable turnkey systemVertical integration targeting simultaneous 2028 activation
Design/ordersGlobal HVDC projects
ManufacturingChesapeake HVDC plant
Installation13,000-ton new CLV
MaintenanceLS Marine Solution capability
Customers can procure cable and installation through one window.

Official fact: The source states that LS Cable already secured 18 months of production volume before plant operation from customers including European transmission operator TenneT. It also cites joint projects such as the Jeju third interconnection as evidence of LS Cable and LS Marine Solution synergy.

4. Market supercycle: demand ahead of supply

Official fact: The source names offshore wind, grid interconnection, AI data centers, and subsea optical cables as the main demand drivers. It cites an IEA outlook that the global offshore-wind market may grow more than 13% annually and reach $1 trillion by 2040.

Official fact: The source includes the view that about 382GW of new offshore-wind capacity over the next decade could create about $130 billion of new subsea-cable demand. It also presents global HVDC market growth from KRW 70 trillion in 2020 to KRW 159 trillion in 2030, and a 16.5% CAGR for the HVDC cable market.

OFFSHORE WIND

Offshore wind

Carbon-neutral policies and offshore-wind farms create demand for long-distance subsea power cables.

GRID

Grid interconnection

Long-distance transmission projects such as the North Sea Supergrid and North Sea Link require HVDC technology.

AI/DATA

AI and data centers

AI training, cloud services, and intercontinental data movement also increase demand for subsea optical cables.

5. Competitive landscape and benchmarking

Official fact: The source describes the HVDC subsea-cable market as an oligopoly led by Prysmian, Nexans, and NKT. It states that, as of the end of the second quarter, Prysmian and Nexans backlogs rose 191% and 200% year over year, respectively.

ItemPrysmianNexansNKTLS Cable
Source positioningGlobal big threeGlobal big threeGlobal big threeChallenger
BacklogYoY +191%YoY +200%No source numberKRW 4tn secured
Major investmentNew plant and vessel investmentU.S. plant acquisition and expansionSweden plant expansionKRW 1tn U.S. HVDC plant and KRW 345.8bn new CLV
Valuation referenceMarket cap about EUR 21.65bn, PER 28.8x, one-year +30.28%No source numberNo source numberUnlisted, included in LS value

6. Shareholder value: different incentives for LS and LS Marine Solution

Source image 3 related to shareholder impact matrix for LS Cable and LS Marine Solution
Shareholder groupOpportunityRisk
LS Cable/LS shareholdersPossible re-rating as a global top-tier subsea-cable solutions company after 2028, U.S. market preemption, group synergy with LS Electric and LS MnMExecution risk from the KRW 1tn plant and KRW 345.8bn vessel, leverage burden from the KRW 400bn EB, and source-stated consolidated debt ratio above 200%
LS Marine Solution shareholdersInstallation pipeline from group orders, global installer leap through the new vessel, valuation re-rating potentialThe KRW 400bn EB may become potential selling pressure equal to about 33% of market capitalization

Interpretation: For LS Marine Solution shareholders, the growth story and overhang exist together. As the share price rises above the exchange price, bond investors have more incentive to exchange and sell, and the market can price this in ahead of time.

7. Checkpoints and final view

  • Whether the Chesapeake plant meets the 3Q27 completion and 1Q28 mass-production targets
  • Whether the new CLV meets the 1H28 operation target
  • Whether large U.S. and European turnkey project orders are announced
  • How much of the EB is actually exchanged and how quickly the market absorbs the shares
  • Expansion plans and order pricing from Prysmian, Nexans, and NKT

In the end, this is a long-term bet with both large upside and real risk. For LS shareholders, it is a route to long-term value creation through the energy-infrastructure supercycle. For LS Marine Solution shareholders, it is a test of whether the company can move through near-term overhang and emerge as a global installation player.

Sources

Naver original