Tokyo Electric Claims May Reach $130 Billion, Merrill Says

Tokyo Electric Power Co., the utility crippled by the worst nuclear accident since Chernobyl, faces claims of as much as 11 trillion yen ($132 billion) if the crisis lasts two years, Bank of America Merrill Lynch said.

Under such a “worst-case” scenario, Tokyo Electric would be unable to absorb the losses even after a capital reduction and debt-to-equity swap of state-guaranteed debt, Yusuke Ueda, a credit analyst at Merrill, wrote in a report yesterday. The utility known as Tepco may face claims of less than 1 trillion yen if the crisis is resolved within two months and as much as 3 trillion yen if it takes about six months, Ueda wrote.