Tokyo Electric Receives Government Aid, Averts Threat of Being Delisted
Tokyo Electric Power Co. (9501) received a $8.9 billion lifeline from the Japanese government, averting the risk of a delisting 11 months after the Fukushima nuclear disaster forced the evacuation of 160,000 people.
The utility, which is still struggling to control temperatures at the stricken plant, should use the funds to compensate victims of the disaster, Trade Minister Yukio Edano told Tepco President Toshio Nishizawa in a meeting today attended by reporters. Tepco said it will announce earnings at 4:30 p.m., a day before all listed companies must report.
Tepco raised its estimate in December for compensation payments to those affected by the disaster, the worst nuclear accident since Chernobyl in 1986, to 1.7 trillion yen ($22 billion). The temperature in one of the damaged reactors at its Fukushima plant rose to levels above safety limits, the utility said today.
The company needs to show its commitment to becoming “a newborn Tepco,” including allowing the government have a majority stake and voting rights, Edano said last week. The extra aid of 689.4 billion yen agreed today wasn’t intended to help Tepco meet the deadline to report its financial statements, he said.
“If Tepco wants a capital injection from the fund, the plan must also include ways to preserve the capital as well as achieve the purpose of the capital injection,” Edano told Nishizawa and officials of the fund in a meeting in Tokyo today. “If Tepco submits a plan seeking capital injection without sufficient voting rights reflecting the size of the injection, I have absolutely no plans to approve it as long as I’m in this position.”
The company said in November it expects a loss of 600 billion yen for the year March, bringing losses from the crisis to 1.85 trillion yen. Tepco reported a full-year loss of 1.25 trillion yen last fiscal year.
Tepco must file a quarterly financial report to regulators by tomorrow under Japanese law. Its shares can be struck from the Tokyo Stock Exchange a month after being placed on a watchlist if no quarterly report is filed, according to bourse rules.
Tepco shares rose 2 percent to 204 yen as of 2:23 p.m. in Tokyo, after gaining as much as 8 percent.
The company also faces rising temperatures at its No. 2 reactor at the Fukushima plant. One of three thermometers indicated the temperature at the bottom of the reactor pressure vessel rose to 93.7 degrees Celsius (200.7 Fahrenheit) today, higher than the 80 degrees limit, Ai Tanaka, a spokeswoman for the utility known as Tepco, said by phone today.
There are no signs of isotopes that would suggest the reactor has gone critical and there’s been no increase in radiation around the site, the company said in a statement. The other two thermometers at the bottom of the vessel showed temperatures of 32.8 degrees and 33.1 degrees earlier today, spokesman Naohiro Omura said. The thermometers have a margin of error of as much as 20 degrees.
“We think the thermometer may be faulty,” Omura said. The other two gauges indicate temperatures are falling, he said.
Tepco and Japan’s government announced on Dec. 16 they succeeded in bringing the reactors into a safe state known as cold shutdown nine months after the March 11 earthquake and ensuing tsunami caused the meltdown of three reactors.
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