'At the Brink KEPCO' Voluntary Retirement, KEPCO KDN to Sell Shares and Talent Development Center

KEPCO Announces Additional Self-Help Measures
Largest Organizational Restructuring Including 20% Reduction of Headquarters Staff

Korea Electric Power Corporation (KEPCO), which has accumulated a deficit of 47.5 trillion won and has liabilities of approximately 201 trillion won in the first half of this year, has decided to implement additional self-help measures, including voluntary retirement and the sale of its Talent Development Center.

On the 8th, KEPCO President Kim Dong-cheol announced these additional measures at the Government Sejong Complex.

President Kim stated, "KEPCO's financial crisis, triggered by the surge in international energy prices, has reached a financial limit that is difficult for a corporation to endure," and emphasized, "We will pour all available resources into implementing the newly announced drastic self-help measures to overcome this life-or-death crisis."

First, KEPCO plans to downsize its organization and strengthen core functions through the largest organizational restructuring since the power generation companies were spun off in 2001.

The headquarters organization will be reduced by 20%, including cutting 2 out of 5 head positions, reorganizing from '8 divisions and 36 departments' to '6 divisions and 29 departments,' thereby reducing 2 divisions and 7 departments. Additionally, small branch offices will be consolidated into nearby key branch offices, and tasks with high synergy upon integration will be collectively performed at regional headquarters and key business offices, reducing business offices by about 25%.

Voluntary retirement will also be implemented. This will be the second time since the company's founding that voluntary retirement is offered to those who wish to participate, within the scope of funds secured for severance pay. The funds for voluntary retirement will be sourced from the wage increase returns of employees at grade 2 or higher in 2024, to be used for severance pay and other compensations.

Asset sales will be further pursued. KEPCO plans to sell the Talent Development Center site (640,000㎡) located in Nowon, Seoul, 20% of KEPCO KDN shares, and all shares of the Calatagan project in the Philippines. President Kim explained, "Although the Talent Development Center is a valuable asset located in Seoul with excellent accessibility and educational conditions, and has served as a training hub for KEPCO and the domestic and international power industry, it had been excluded from previous self-help measures. However, due to the desperate situation to overcome the management crisis on the brink, we have decided to sell it," adding, "We expect to generate about 1 trillion won in cash from the sale of the Talent Development Center."

KDN, which provides ICT services in the power industry, will pursue the sale of 20% of its 100% owned shares through listing on the domestic stock market to enhance its sale value. The Calatagan solar power project shares, which have secured fixed dividends, show good profitability, and have few sale restrictions, attracting high investor interest; KEPCO will sell all 38% of its shares. Regarding this, President Kim said, "Following the sale of the Philippine coal project included in previous self-help measures, selling the solar power shares is part of the process of shifting KEPCO's overseas branch capabilities to other areas," and added, "For high-quality assets, we will maintain a certain scale of shares."

President Kim also emphasized the faithful implementation of the existing innovation plan. He said, "We will continue negotiations with the labor union for the implementation of the innovation plan and the return of wage increases, and faithfully execute the already announced self-help measures such as the sale of the Nam Seoul headquarters," adding, "Through the Emergency Management and Innovation Committee, we will identify key tasks in five subcommittees including financial crisis response, establish detailed action plans, and build a concrete inspection and feedback system to ensure task implementation."

Kim Dong-chul, President of Korea Electric Power Corporation, is announcing additional self-rescue measures at the Government Sejong Complex on the 8th.
[Image source=Yonhap News]

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