South Korea Scraps Auction to Sell South-East Power Stake
Friday March 28
SEOUL, South Korea -- The South Korean government has scrapped its plan to sell its stake in Korea South-East Power Co. through an auction because there were no bids submitted, the Ministry of Commerce, Industry and Energy said Friday.
Instead, the government plans to sell a 10% to 20% stake in the power company in an initial public offering late this year or early next year, the commerce ministry said.
Korea South-East is a unit of state-run Korea Electric Power Corp. , or Kepco.
Kepco had originally planned to sell a 34% to 51% stake in the wholly-owned unit through an auction.
Potential bidders failed to submit bids partly due to the economic uncertainty on the domestic and overseas fronts, the ministry said.
The government plans to select a lead manager for Korea South-East's IPO in April.
After Korea South-East's listing, the government will gradually seek IPOs for other Kepco units.
The government also plans to create a power company privatization fund, and plans to sell about 10% of the shares of Kepco's five units to the fund, the ministry said.
It said it plans to sell management control of Korea South-East Power after it lists on the market, and after market sentiment improves at home and overseas.
Kepco late last year received letters of intent for the Korea South-East stake from 14 local and foreign companies, including steelmaker Posco (PKX) and oil refiner SK Corp.
The stake sale is part of the South Korean government's plan to privatize five of six Kepco power units, which were spun off last year.
Kepco split its power-generating operations into five non-nuclear power companies and one hydro/nuclear power company. It will retain the hydro/nuclear unit for security reasons.
Korea South-East is the first of the five power-generating units to be privatized. |
