Korea Electric Power Corporation (KEPCO) headquarters in Naju, South Jeolla Province / Courtesy of KEPCO

The government said Thursday that it will intensely monitor the country's power monopoly Korea Electric Power (KEPCO) and 13 other state-run firms over financial health concerns.

The finance ministry said the 14 firms earned low grades in the government's financial health assessment, as either their profitability has deteriorated or their debt levels remain high.

The companies include Korea Railroad, KEPCO's five power-generating affiliates, Korea National Oil and Korea Gas.

The government said it has decided to keep close tabs on their financial health on concerns that further deterioration of this could evolve into a spike in debt or insolvency of all public firms.

The combined debt held by the 14 on the watch list amounted to 372.1 trillion won ($286.4 billion) as of the end of 2021, accounting for 64 percent of the total indebtedness at 350 state-run companies.

KEPCO chalked up widening losses due to soaring energy costs. It reported a record high operating loss of 7.78 trillion won in the first quarter of this year, larger than the operating loss of 5.86 trillion won logged for all of 2021.

The finance ministry said it will draw up details of a five-year plan by next month to improve their financial health and monitor their progress.

Envisioned measures call for the companies to sell non-core assets, streamline their business structures and take other steps to enhance their financial status. (Yonhap)