The government’s bailout of Tokyo Electric Power Co. will be similar to the 2003 rescue of struggling Resona Holdings Inc., trade and industry minister Yukio Edano said Tuesday.
“The capital injection into Resona will be the model for when the government injects capital” into Tepco, Edano told reporters in Tokyo. “It’s widely agreed that Resona has returned to health.”
While the government plans to bail out the utility, which has been relying on aid to cover nuclear disaster-related compensation, Edano said Monday the government expects to receive “sufficient” voting rights in return for a capital infusion, adding he would veto any plan that doesn’t include this provision.
A government panel has said Tepco may face compensation payments of up to ¥4.5 trillion by March 2013.
Under Prime Minister Junichiro Koizumi, the government pumped ¥1.96 trillion into Resona in 2003 after its capital fell below the minimum regulatory requirement, and received majority voting rights in the bank.
Resona returned to profit in the year that ended in March 2005 and stayed profitable throughout the global financial crisis, when governments around the world were forced to rescue banks crippled by loan losses and write-downs on mortgage securities.