Tepco to keep receiving ¥77 billion in bank loans after repayment deadline

Kyodo, JIJI

Twenty-eight financial institutions will continue to extend ¥77 billion in loans to struggling Tokyo Electric Power Co. beyond the October repayment deadline, sources said Saturday.

The refinancing is expected to stabilize Tepco’s management and advance its cleanup efforts at the crippled Fukushima No. 1 facility.

It follows Tepco’s application Friday for state safety inspections of two reactors at its Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture, joining four other utilities seeking to reactivated atomic power stations idled because of the Fukushima crisis. Power companies have been bleeding money to cover the costs of thermal power generation since the March 2011 meltdowns at Fukushima No. 1.

The 28 institutions include Sumitomo Mitsui Banking Corp. and regional lenders. In August, Tepco presented its creditor banks with an income and expenditure plan that stated its aim of moving into the black in fiscal 2013 by reactivating idled reactors or hiking electricity rates.

Although the refinancing means Tepco in October will be able to clear the most pressing financial hurdle, the utility still needs to secure ¥300 billion in fresh loans and to refinance ¥200 billion worth of existing loans in December.

Tepco intends to seek further support from its creditor banks for those moves after revising its special management plan approved by the government in May 2012, the sources said.