[THE INVESTOR] Eight of Korea’s state-run energy companies, including subsidiaries of Korea Electric Power Corporation, will push for initial public offerings from the first half of 2017, the government said on June 14.

The Korean government announced the plan as part of its broader corporate restructuring efforts on public energy and resource development firms against the backdrop of low international oil prices. 


Under the scheme, five subsidiaries wholly owned by KEPCO, including Korea South-East Power, will be listed on the local exchange in phases.

Three other energy corporations, including Korea Hydro and Nuclear Power, KEPCO KDN and Korea Gas Technology Corporation will also go public.

Some 20 to 30 percent of each company’s outstanding stakes are subjected to the public offering, as the government seeks a transition from state ownership to mixed ownership by retaining at least 51 percent of control.

The government expects that the listing will increase the energy companies’ management transparency and improve their financial structure with the inflow of cash.

Analysts said the IPO plan will not have a major impact on KEPCO’s stock price in the short term.

“The impact of the IPO won’t be significant. Because its stock price is still undervalued compared to its expanded profits. Plus, its dividend yield ratio is as high as 3 percent,” said Yoon Hee-do, an analyst at Korea Investment & Securities.

Shares of KEPCO shed 0.83 percent to close at 59,700 won ($50.89).

By Park Han-na (hnark@heraldcorp.com)