Gov’t to push for law revision on debt-ridden KEPCO’s bond issuance

SEOUL– The industry ministry said Friday it will again push for a law revision meant to raise the ceiling of bond issuance by the money-losing state-run Korea Electric Power Corp. (KEPCO) in a move to prevent its liquidity crisis and ensure stable power supplies.

The ministry made the decision in an emergency meeting with the utility firm, the finance ministry and the Financial Services Commission, a day after the National Assembly voted down the revision to the KEPCO Act that allows the company to issue bonds worth up to five times the sum of its equity capital and reserves.

Currently, the maximum is set at two times, and the revision was pushed for as KEPCO has been struggling with huge losses on high fuel costs and limited electricity rate hikes.

During the first nine months of this year, KEPCO logged a net loss of 21.83 trillion won (US$16.71 billion), which is an all-time high, and its yearly losses are expected to reach 30 trillion won.

“The revision is desperately needed to secure its necessary liquidity. The government will react proactively for its passage at the National Assembly,” the ministry said in a release.

The government will seek cooperation with financial institutions for its smooth financing while working to devise a road map at an early date to “normalize” electricity rates.

“KEPCO’s financial issue could cause a crisis in the overall economy, and the government needs to cooperate to overcome the difficulty,” Second Vice Industry Minister Park Il-jun said.

He also called on the company to redouble efforts to implement self-rescue plans. Earlier, KEPCO vowed the restructuring of overseas businesses, property sales and other cost-cutting moves.

In a vote at a plenary session attended by 203 lawmakers on Thursday, 89 approved, 61 objected and 53 abstained on the revision.

Source: Yonhap News Agency

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