Kepco appoints debt restructuring advisors

Credit Suisse First Boston and Lehman Brothers are chosen to unwind the utility''s complicated cross-guarantees and covenant restrictions tied its foreign currency debt.

The two banks, which bid together for the mandate, have beaten Deutsche Bank, Goldman Sachs and UBS Warburg, which all bid separately. They will now join Daiwa, already mandated to handle the company's yen-denominated debt.

According to analysts' figures, Kepco has a total debt load of just over $20 billion, of which just over $6 billion is foreign-currency denominated. All debt incurred prior to the separation of five generating assets gencos from the parent in April 2001 have cross-guarantees with the parent and it is these guarantees which are now preventing the sale of the gencos to private investors under the next stage of the government's restructuring and privatization of the electricity industry.

The cross-guarantees...

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