Liontown shares in focus as LG Energy Solution swaps $250m debt for equity

The Liontown Ltd (ASX: LTR) share price is in focus after the company announced LG Energy Solution will convert its entire US$250 million convertible note into equity, resulting in LG Energy Solution holding around 8% of Liontown’s shares. The move will eliminate future interest costs and simplify Liontown’s capital structure.

What did Liontown report?

• LG Energy Solution to convert its full US$250 million convertible note plus accrued interest into equity
• Conversion results in LG Energy Solution holding about 8% of Liontown’s issued shares
• Conversion price set at A$1.62 per share, following adjustment after the August 2025 capital raising
• Convertible note fully eliminated, removing future interest obligations
• Leaves only A$300 million Ford facility and A$15 million WA Government interest-free loan as borrowings
• Balance sheet strengthened with A$390 million cash at bank as at 31 December 2025

What else do investors need to know?

The note conversion simplifies Liontown’s capital structure, freeing up capacity for future growth. By removing a major debt instrument, Liontown can reduce its future interest expenses and present a stronger balance sheet to investors and partners alike.

The conversion also deepens the company’s ties with LG Energy Solution, already a strategic customer and now a substantial shareholder. This relationship supports Liontown’s ambitions to become a leading global lithium supplier.

What did Liontown management say?

Managing Director and CEO Tony Ottaviano said:

LG Energy Solution’s decision to convert their entire holding to equity is a strong endorsement of Kathleen Valley’s tier-one quality and our operational execution.

This conversion delivers immediate benefits to shareholders. It simplifies our capital structure, eliminates future interest obligations on the notes, and strengthens our balance sheet — giving us real financial firepower as we scale production, while remaining focussed on shareholder returns and disciplined capital allocation.

Importantly, it deepens an already important strategic partnership with LG Energy Solution. LG Energy Solution was instrumental in supporting our transition to producer, and their decision to become a significant equity holder further aligns our interests. We now have one of the world’s leading battery manufacturers as both a cornerstone shareholder and a long-term offtake customer — a powerful combination as we execute on Liontown’s full potential.

We look forward to continuing this partnership as we deliver on our shared ambition to supply high-quality, responsibly sourced lithium to the global energy transition.

What’s next for Liontown?

With a more streamlined capital structure and enhanced cash position, Liontown aims to scale up production at the Kathleen Valley lithium project. Management has emphasised a disciplined approach to capital allocation and remains focussed on delivering value to shareholders.

The strengthened strategic partnership with LG Energy Solution is expected to support Liontown’s plans for further downstream growth and long-term offtake, positioning the company strongly for the global shift towards battery minerals.

Liontown share price snapshot

Over the past 12 moths, Liontown shares have risen 213%, strongly outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

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The post Liontown shares in focus as LG Energy Solution swaps $250m debt for equity appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.