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Market Chatter: Korea's Kepco Seeks $15 Billion Power Prepayment From Samsung

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Korea Electric Power, or Kepco, has suggested that Samsung Electronics should make a 20 trillion won ($14.7 billion) pre-payment for power consumption through 2031, to enable KEPCO to invest more in expanding the electricity grid, Korea's Chosun news outlet said on Wednesday.

The two companies are currently in negotiations over the proposal including over interest payments to Samsung, which would exceed those on offer from government bonds.

The pre-payment would be a means for Kepco to secure investment capital without issuing more corporate bonds on top of an existing 210 trillion won debt pile, Chosun said, noting it had seen internal Kepco documents relating to the proposal.

Kepco has also proposed that SK Hynix prepay 5 trillion won for future power consumption, the article said. It said the unusual financing mechanism is being considered because of Kepco's massive debts that could soon breach government-imposed limits, even as power demand surges.

Kepco did not immediately respond to' requests for comment on the matter.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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