Tokyo Electric Slumps Following Report Government May Buy Common Shares
Tepco Slumps
Tomohiro Ohsumi/Bloomberg
Signage for Tokyo Electric Power Co. (Tepco) is displayed outside the company's headquarters in Tokyo, Japan.
Signage for Tokyo Electric Power Co. (Tepco) is displayed outside the company's headquarters in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg
Tokyo Electric Power Co. (9501) shares fell as much as 12 percent after the Nikkei newspaper said the government may buy common shares to take control of the utility.
The stock fell as much as 12 percent to 153 yen, the lowest intra-day price since June 9 last year. It traded at 170 yen at 10:52 a.m. on the Tokyo Stock Exchange. Tepco has dropped 92 percent since the day before the March 11 quake and tsunami wrecked its Fukushima Dai-Ichi nuclear plant, causing radiation leaks and mass evacuations.
The government-backed Nuclear Damage Liability Facilitation Fund plans to acquire common stock as early as this summer, as part of a 1 trillion yen ($13 billion) capital injection into the company, the Nikkei newspaper reported on Jan. 7.
“The issue of a capital injection is an option, yet no conclusions to discussions have been reached,” said Chie Hosoda, a spokeswoman for Tepco. She declined to comment on negotiations with banks cited in a Nikkei report today.
Without the capital, the utility faces insolvency by the end of March 2013 because of dismantling and decommissioning costs for the reactors at the Fukushima Dai-Ichi plant as well as rising fuel costs to run thermal plants, the newspaper said.
Separately, the utility and banks will start talks this week for lending an additional 1 trillion yen as early as April, the Nikkei reported today, without saying who provided the information. Tepco received 2 trillion yen in emergency loans last year related to the Fukushima nuclear disaster.
To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net
To contact the editor responsible for this story: Peter Langan at plangan@bloomberg.net
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