Korea Electric Power Corp. (KEPCO) will sell all property and stake assets possible and streamline overseas operations to improve balance sheet, which logged near 8 trillion won ($6.3 billion) in operating loss in the first quarter and may stretch to as much as 30 trillion won if runaway fuel costs and shortage of soft coal keep up.

On Wednesday, chiefs of 11 public power companies including KEPCO and five generators met for an emergency meeting at KEPCO Art Center in Seocho District, southern Seoul.

They agreed to improve the balance sheet by minimum 6 trillion won through restructuring endeavors.

It aims to save 2.6 trillion won through belt tightening, 1.9 trillion won through overseas business streamlining, 800 billion won through equity sale, and 700 billion won through property sale. It would strive to save production cost, although the means have not been disclosed.

The emergency move comes after its shocking first-quarter results.

The company reported an operating loss of 7.8 trillion won in the January-March period, overwhelming last year’s record annual operating loss of 5.9 trillion won.

Market consensus put annual loss at 23.05 trillion won this year, with at least one forecasting red in 30 trillion won range.

To cut production cost, the state utility will allow generators to expand joint purchase of bituminous coal amid supply shortage and price jump. Soft coal responsible for about 34 percent in power generation in Korea has become short as European countries and others are seeking coal imports from Asia Pacific producers in place of Russian gas and petroleum due to sanctions for its Ukraine invasion.

KEPCO and power producers will also tighten their belts by reducing current costs such as business operating expenses. They will put on hold upgrading and investment projects including the reinforcement work on Hadong Thermal Power Plant.

KEPCO will expedite sale of overseas stakes and operations. It hopes to sell its stake in the joint venture in Cebu, Philippines, and solar power project in the U.S. within the year.

It will offer some part of equity in KEPCO Engineering & Construction and its share in Korea Electric Vehicle Charging Service, a JV with KT since 2015. Shares in unlisted subsidiaries such as KEPCO KDN will be sold after listing.

The state utility firms will try to sell all of their idle real estate properties - 15 properties under KEPCO worth 300 billion won and 10 under the rest estimated at 100 billion won.

New hiring will be stopped until conditions improve.

Shares of KEPCO were trading 0.89 percent lower at 22,350 won on Thursday morning.

By Song Gwang-sup and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]