Kepco's debt limit raised by the National Assembly

Kepco has been requesting that the cap on its corporate bond sales be lifted from twice the size of its equity to six times.

Korea Electric Power Corp.'s office in Naju, South Jeolla. The National Assembly approved Kepco's request to raise the limit of corporate bonds it could issue on Wednesday. [YONHAP]

The National Assembly voted Wednesday in favor of raising the limit on bond sales by Korea Electric Power Corp.(Kepco).

Of those voting, 166 were in favor, while were nine opposed.

Kepco has been requesting that the cap on its corporate bond sales be lifted from twice the size of its equity to six times.

A bill that allows Korea Gas Corp. to issue corporate bonds from quadruple the size of its equity to five fold passed on the same day.

The bills passed the National Assembly 20 days after the legislators first rejected them.

Previously, the request was denied by the Democratic Party, which holds the majority of the seats, arguing that the higher limit will not solve the liquidity crisis.

Concerns about the ability of the utilities to run have increased.

Moody's said Kepco’s credit ratings could be lowered due to the DP decision and added that any delays in the implementation will worsen Kepco’s funding channels.

Kepco has been reporting a record operating losses as costs rise and politicians are hesitant to raise electricity rates too quickly.

Bills on extending the freight rate system, which provides steady income for cargo truck drivers, was not submitted for a vote at the National Assembly.

Cargo truck drivers held a strike for two weeks until Dec. 9 demanding that the government make the freight rate system permanent and apply it to a wide range of trucking.

The Yoon Suk-yeol government believes that the freight rate system should be re-evaluated and overhauled.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]