The government will effectively nationalize Tokyo Electric Power Co. on July 25 by injecting ¥1 trillion in taxpayers’ money into the nation’s biggest utility, which has been swamped by liabilities related to the Fukushima nuclear disaster, Tokyo Electric said Monday.
The government will initially acquire 50.11 percent of Tepco’s voting rights, which will allow it to choose the utility’s board members. It also will be able boost its stake to 75.84 percent should it want even stronger control to push through reforms.
Tepco plans to change its articles of incorporation at its annual shareholders’ meeting on June 27 to allow for the increase in authorized shares, which now stand at 1.8 billion.
Tepco will then issue two new types of preferred stock — one with voting rights, and another without but which can be converted into common shares with voting rights.
The state-backed Nuclear Damage Liability Facilitation Fund will pay out the ¥1 trillion on July 25, giving it 1.6 billion shares of preferred stock with voting rights costing ¥200 each, and 340 million preferred convertible shares priced at ¥2,000 each.