Tepco Falls After President Highlights Fukushima Cost Riskby and
Japan utility declines 3.3% to settle at lowest in two weeks
Company seeks government help to eliminate insolvency risk
Tokyo Electric Power Co. Holdings Inc. closed at the lowest in more than two weeks after its president said it may face insolvency if it recognized at one time the cost of decommissioning the wrecked Fukushima nuclear plant and that it’s asked the government to help eliminate the risk.
Tepco, as the company is better known, fell as much as 7.9 percent during intraday trading and closed 3.3 percent lower at 414 yen a share in Tokyo, the lowest since Sept. 16. The benchmark Topix index rose 0.6 percent.
“As it becomes possible to estimate the Fukushima decommissioning cost, we will have the problem of recognizing the liability at once. That means there is a possibility Tepco becomes insolvent,” President Naomi Hirose told reporters in Tokyo Wednesday after meeting with a Ministry of Economy, Trade and Industry commission charged with reforming the company. “We are requesting institutional measures to remove such risk.”
As of June, nearly 1 trillion yen ($9.7 billion) has been allocated to decommissioning and water treatment at Fukushima, Tepco spokesman Tatsuhiro Yamagishi said last month.
The March 2011 nuclear accident and its fallout will ultimately cost more than 11 trillion yen, according to a study by Japanese college professors including Kenichi Oshima, a professor of economics at Ritsumeikan University.