The South Korean government announced plans to privatise five state enterprises and 21 subsidiaries by selling stakes to foreign and local investors. The organizations involved include the state electricity utility Korea Electric Power Corp (KEPCO) and the manufacturing company Hanjung, which is involved in power plant construction.
The government will retain more than 51 per cent of the shares in KEPCO under the terms of agreements for foreign loans. The power generation arm of the company will be separated from the transmission and distribution arms, and prepared for early privatization.
The government expects to sell 5 per cent of its current 58.2 per cent holding by the end of this year. Electricity industry restructuring to allow direct trading of electricity will be drawn up in October.
In 1999, two thermal power plants and two combined cycle plants are scheduled to be sold. Foreign companies have already expressed an interest.
Hanjung is jointly controlled by the Korea Development Bank, with 43.8 per cent of the shares, KEPCO with 40.5 per cent and the Foreign Exchange Bank with 15.7 per cent. The company has been the sole supplier of nuclear equipment in Korea and has taken a lead role in nuclear plant construction. Shares will be sold to both local and foreign investors.