International Shareholder Services, one of the world’s two largest proxy advisory firms, has advised shareholders to vote for LG Chem’s decision to split off of its battery business division as a wholly-owned subsidiary.

According to industry sources Sunday, ISS said in a recent report that LG Chem’s split-off is reasonable considering that the company will be able to secure funding to finance the investment required for the expansion of its fast-growing battery business.

Also, regarding LG Chem’s announcement Wednesday that it would offer cash dividends of at least 10,000 won ($8.73) per common share for the next three years by 2022 and allocate minimum 30 percent of net income for dividends, ISS evaluated that LG Chem is making efforts to communicate with shareholders.

The split-off awaits a final approval at shareholders meeting scheduled for Oct. 30. If approved, the new batter company, LG Energy Solution, will be officially launched on Dec. 1.

To soothe retail investors opposing the split-off, most of whom purchased LG Chem’s stock for expectations on its booming battery business, the company said last month it would maintain a dominant share of 70-80 percent in LG Energy Solution even after taking the subsidiary public in the future.

The endorsement from ISS came shortly after Glass Lewis, the other proxy adviser, recommended investors support the split-off as the structural change would be a “technical” issue confined to an internal reorganization, adding that shareholders would not be affected by the move.

ISS and Glass Lewis, which are world’s leading two proxy advisers, vote corporate ballots, called proxies, on behalf of investor clients and make recommendations on matters ranging from executive pay to climate change.

By Kim Byung-wook (kbw@heraldcorp.com)