Bidding starts in sale of Kepco HQ

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Bidding starts in sale of Kepco HQ

Korea Electric Power Corp. (Kepco) will accept bids for the sale of its headquarters and the land surrounding it starting at 10 a.m. today.

Kepco is selling 79,342 square meters (19.6 acres) and a building in Samseong-dong, Gangnam District, southern Seoul. Bids will be accepted through Sept. 17.

The sale is expected to bring in 3 trillion won ($2.96 billion), with the land alone assessed at 2 trillion won to 2.5 trillion won.

Kepco announced last month its plan to relocate its headquarters to South Jeolla by November.

The sale is part of a debt restructuring plan pushed by the Park Geun-hye administration. The goal is to slash Kepco’s debt by 14.7 trillion won by 2017.

Hyundai Motor said it will aggressively pursue the Kepco property.

“We plan to create a landmark in Seoul that incorporates business, culture and conventions by constructing a unified headquarters [of all affiliates] that acts as a global control tower of the motor group, as well as an automotive industry theme park, convention center and space where visitors can experience Hallyu [the Korean wave],” the company said in a statement yesterday. The company’s plan is modeled on Volkswagen’s Autostadt in Wolfsburg, Germany.

Other possible bidders include Samsung Group, led by Chairman Lee Kun-hee’s eldest daughter, Lee Boo-jin, as well as Chinese real estate developer DuDu China and Las Vegas Sands Corporation.

Meanwhile, Moody’s yesterday raised the credit rating of Kepco to Aa3, the same as for the Korean government.

Kepco was given an outlook of “stable,” meaning the company is forecasted to maintain its current credit rating for three to 18 months.

Of Moody’s 21 ratings, Aa3 is the fourth highest and means that the company demonstrates overall financial stability.

This is equivalent to the AA rating given to Kepco by Fitch Ratings.

The enhanced rating follows the company’s improved performance, recording an operating profit in 2013 for the first time in six years.

Also, Moody’s took into account the government’s push for Kepco and other debt-ridden public companies to tighten their belts and eliminate lax management practices.

An increase in the power reserve as a result of operating additional power plants during the past year also contributed to the higher credit rating, Kepco said.

BY LEE HO-JEONG, Kim ji-yoon []

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