Public firms slash debts

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Public firms slash debts

After the government started pushing a series of reforms for debt-ridden public corporations last year, 11 public energy companies yesterday reported that they have reduced debt by a total of 3.4 trillion won ($3.3 billion) so far this year.

That’s about 77 percent of their intended debt reduction of 4.6 trillion won, which is supposed to be accomplished by August.

Yoon Sang-jick, minister of trade, industry and energy, had a meeting yesterday with heads of the 11 energy companies, including the Korea Electric Power Corporation (Kepco) and the Korea Hydro and Nuclear Power Corporation (KHNP), and five other companies under the reform plan, including the Korea Trade Insurance Corporation (K-sure) and Kangwon Land Casino, at Sejong Government Complex, to check their performances on debt reduction.

Yoon explained the significance of leadership to reach the goals.

“The CEOs should take the lead in bringing out labor-management negotiations to come up with solutions to lax management practices, such as excessive employee welfare benefits,” Yoon said.

Almost 1.9 trillion won, more than half of the debt reductions, came from companies adjusting their ongoing projects and future business plans.

The companies also saved 746 billion won by slashing employee benefits and 618 billion won from selling off corporate assets like land.

Kepco, the nation’s power distributor and the largest public corporation, managed to reduce 241 billion won in debt by delaying overseas projects and downsizing other power generation projects - 226 billion won by reducing operating costs and 17.9 billion won by selling off buildings and land.

For KHNP, the nuclear power plant operator, and the Korea Gas Corporation, the main source of savings was delaying projects or downsizing businesses.

KHNP saved about 260 billion won by adjusting ongoing projects and 97 billion won by adjusting investments in new nuclear reactors. Kogas saved 245 billion won by delaying new businesses and 74 billion won from downsizing a business in Canada.

The Korea National Oil Corporation saved 519 billion won from selling its oil storage facilities in Ulsan and 49 billion won from selling an oil well in Indonesia.

According to the debt reduction plan approved by the National Assembly last month, the companies are scheduled to reduce a debt of 185.9 trillion won by 2017.

BY KIM JI-YOON [jiyoon.kim@joongang.co.kr]

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