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KEPCO to sell key real estate in Seoul, freeze wages over mounting losses

Economy 10:24 May 12, 2023

SEOUL, May 12 (Yonhap) -- South Korea's state-run utility Korea Electric Power Corp. (KEPCO) said Friday it will sell a major building in Seoul and freeze wages of ranking employees as part of its efforts to improve its financial soundness and achieve management innovation over mounting losses.

They are part of a set of self-rescue measures that aim to save more than 25 trillion won (US$18.77 billion) over the next five years, as KEPCO suffered snowballing losses due to high global energy prices and limited hikes in electricity rates amid high inflation and growing economic burdens on the people.

KEPCO earlier came up with plans that call for saving 20 trillion won through the restructuring of overseas businesses and property sales, but the ruling People Power Party and the government have demanded stronger reform measures before seeking electricity rate hikes.

Under the latest plan, the company said it will sell its building in Seoul's financial district of Yeouido, along with dozens of buildings owned by the company and its affiliates across the country, and rent part of its art center in southern Seoul and several other properties.

It decided to freeze wages of ranking officials to use the money to support energy-vulnerable groups and begin talks with the labor union to have all the workers join the move.

KEPCO will also adjust plans to construct electricity facilities and streamline its organization structure.

In 2022, KEPCO logged a record-high operating loss of 32.63 trillion won, more than quadruple from a year earlier, and it was forecast to suffer over 5 trillion won in loss for the first quarter of this year.

The government raised the electricity rates by 13.1 won per kilowatt hour for the January-March period, and the decision on the second-quarter utility bills was yet to be made after a monthlong delay.

In a report submitted to the National Assembly, KEPCO called for a 51.6 won rate increase this year.

This photo taken May 9, 2023, shows the headquarters of the Korea Electric Power Corp. (KEPCO) in Seoul. (Yonhap)

This photo taken May 9, 2023, shows the headquarters of the Korea Electric Power Corp. (KEPCO) in Seoul. (Yonhap)


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