The government will provide an additional ¥689.4 billion to Tokyo Electric Power Co. over massive compensation payments related to the Fukushima No. 1 plant triple-meltdown crisis, a move that will lower the risk of the cash-strapped utility failing.
Trade and industry minister Yukio Edano agreed to Tepco’s cash request at a meeting Monday with Tepco President Toshio Nishizawa.
The utility announced its earnings projections for the year to March 31 later in the day, widening the loss estimate to ¥695 billion from the ¥600 billion it announced in November. With the announcement of the financial statement, the company met the deadline of Tuesday before its shares can be struck from the Tokyo Stock Exchange a month after being placed under supervision if no quarterly report is filed, according to bourse rules.
The government’s provision of additional money to Tepco will raise the total amount of financial aid from the state-backed Nuclear Damage Liability Facilitation Fund to more than ¥1.5 trillion.
Edano said last week the utility needs to show its commitment to becoming “a newborn Tepco” after widespread criticism of its handling of the disaster.
That includes handing over control to the government if necessary, he said Monday, after approving Tepco’s cash request.
“If Tepco submits a plan seeking a 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,” Edano told Nishizawa during their meeting.
“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 said.
The government and Tepco are in backroom negotiations over a plan to inject public funds, with the government hoping to acquire more than a two-thirds share of the company and Tepco trying hard to maintain management independence.
The utility requested additional assistance partly because a government panel presented in December a new compensation guideline, which makes an extra 1.5 million people in Fukushima Prefecture entitled to compensation payments.
But even with the financial assistance, Tepco faces an extremely tough environment because of increasing fuel costs for thermal power generation to make up for falling nuclear power output in light of the Fukushima No. 1 plant disaster and subsequent reactor shutdowns for checks.
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