Gov`t to privatize affiliates of SOEs

Twenty-nine subsidiaries of state-owned enterprises (SOEs) will be privatized by the end of next year. Of them, 21 affiliates, including Korea Telecom Powertel, Noryangjin Fishery Market and Korea Highway Management Corp., will be sold off to the private sector within the year. Four companies, including Hanyang Wood and Korea Water Technology Corp., will be liquidated while two others, including Korea Telecom M.com, will be integrated into their parent companies. On the bankruptcy of Korea Real Estate Corp., the government decided to let creditors work out what to do with the company.

The Ministry of Planning and Budget (MOPB) unveiled a plan to dispose of 41 subsidiaries of SOEs Wednesday. Under the blueprint, 36 companies will be privatized or merged in the next two years and the remaining five will be kept as they are.

If fully implemented, the plan would increase the number of privatized subsidiaries of SOEs to 56. Between 1998 and last year, the government merged or privatized 20 companies. Among 21 companies to be privatized this year are Noryangjin Fishery Market, Korea Cold Storage, Powercomm, Korea Electric Power Technology, Korea Telecom Powertel, Daehan Real Estate Investment, Korea Highway Management Corp. and Korea Ginseng Corp. Work to privatize eight companies such as Korea Telecom Hitel, Korea Telecom Freetel and Korea Telecom Public Telephone will be completed next year. Of the 29 companies, 17 will take charge of their own privatization while 12 will see managerial rights handed over to the private sector along with control of their parent firms. MOPB also decided to liquidate or integrate into their parent companies five companies, including Hanyang Metal Ind. and Korea Telecom M.com, within the year, and liquidate Korea Telecom`s subsidiary in the Philippines (KTPI) in the first half of next year. But the government decided to retain five companies such as Korea Tourism Development Corp. and Korea Electric Power Data Network.

Kwon Soon-Hwal shkwon@donga.com