Japan Government Reportedly To Buy Partial Stake In Tokyo Electric Power, Parent Company Of Nuclear Plant

March 31, 2011 10:40:09 PM

TOKYO (Reuters) - TOKYO, April 1 (Reuters) - Japan's government plans to take control of Tokyo Electric Power Co <9501.T>, the operator of a stricken nuclear power plant, by injecting public funds, the Mainichi newspaper said on Friday.

But the government is unlikely to take more than a 50 percent stake in the company, an unnamed government official was quoted by the daily as saying.

"If the stake goes over 50 percent, it will be nationalized. But that's not what we are considering," the official was quoted by the paper as saying.

The company, also known as TEPCO, has come under fire for its handling of the emergency at its Fukushima Daichi nuclear complex, triggered by a March 11 earthquake and tsunami that left more than 27,500 people dead or missing.

Mainichi quoted an unnamed government official as saying: "It will be a type of injection that will allow the government to have a certain level of (management) involvement."

A series of missteps and mistakes, combined with scant signs of leadership, have further undermined confidence in the company. Poor communication has led to some heated exchanges in media conferences as journalists demanded information.

TEPCO could face compensation claims topping $130 billion if Japan's worst nuclear crisis dragged on, Bank of America-Merrill Lynch estimated this week, further fuelling expectations Japan's government will step in to save Asia's largest utility.

Investor concern about the future of Tokyo Electric mounted after its president, Masataka Shimizu, was admitted to hospital and the company said on Wednesday that 2 trillion yen ($24 billion) in emergency loans from Japan's major banks would not cover its mounting costs.

Liabilities for compensation claims alone could be up to 11 trillion yen ($133 billion) -- nearly four times TEPCO's equity -- if the nuclear crisis drags on for two years, an analyst at Bank of America Merrill Lynch wrote in a report.

TEPCO shares are down almost 80 percent since the disaster.

Bank of America-Merrill Lynch said shareholders were very likely to take a big hit and a rapid resolution of the crisis was the only way to keep costs down.

If the situation can be turned around within the next two months, compensation costs may be less than 1 trillion yen. Costs will rise to 3 trillion yen if it drags on for six months, analyst Yusuke Ueda wrote.

Experts, however, say a final resolution of the nuclear disaster is likely to take decades and there could be many further setbacks.

TEPCO could burn through 2 trillion yen in about a year, said CLSA equity analyst Penn Bowers, as it pays extra for fuel to run its thermal plants, among other costs.

TEPCO has around $91 billion in debt including some $64 billion in bonds. That excludes about $24 billion recently secured in loans from domestic lenders.

At the end of December, TEPCO had equity of about $35 billion, its accounts show.

(Reporting by Yoko Nishikawa, Kazunori Takada and Taiga Uranaka; Writing by Dean Yates; Editing by Alex Richardson)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[AFVET65]

06:43 PM on 04/01/2011

Here's a link to alot of information in one easy place. THe governments have not been very honest, but make your own assuptions. Thanks to all who read and appreciated the article, Peace! http://gmanfortruth.wordpress.com/2011/03/31/fukushima-coverup/

[tulsey]

03:52 PM on 04/01/2011

Wait a minute, I though "We're from the government, and we're here to help" was a bad thing. Maybe BP can plug it. Silver lining, new self cooking, glow in the dark Japanese seafood.

[AFVET65]

01:09 PM on 04/01/2011

The Japanese government shouldn't be in charge at all, they aren't telling the truth to their own people. Our government hasn't been very good to us either. This is better info than both have been able to provide: http://gmanfortruth.wordpress.com/2011/03/31/fukushima-coverup/

[chabuka]

02:21 PM on 04/01/2011

Right...! TEPCO was doing it the right way...(right?)...don't think that maybe TEPCO was a little evasive, possibly less than forthcoming about the truth of the disaster...? kind of like BP was in the most recent Gulf disaster...? Or Exxon in Alaska...? Or Chernobyl , Three Mile Island, Love Canal, etc....looks exactly like U.S. economic policies...protect the International Corporations (profits) at the expense of the taxpayer..socialize the risk/loss...but, keep the Corporations profits/assets private

[Brandon Baier]

04:26 PM on 04/02/2011

Arent you the one talking in another thread about Nationalizing Oil rights and now your up here damning the government because of its Corporate interests and policies. I think you might want to look at the whole picture for a minute. You are exactly right in this post IMO, I am simply saying to take it a step further. In a democratic society We are the Government, but we arent a full on Democracy anymore are we? Between the Lobbies and the secret societies, the Builderbergers, the Bohemians, the CFR, America isnt as much of a democracy as we are lead to believe. Remeber this:
Jason Goulde is remembered as saying "I can always hire one half of the working class to kill the other half." He made his fortune on Investment Finaces and Land Speculation, the two most crooked jobs on Wall Street.

[MissKaren]

11:58 AM on 04/01/2011

Why not a temporary nationalization? This would put the Japanese government in charge of the cleanup and the decommissioning of the Fukushima Daichi plant. Given the fact that the government is going to have to pay for the consequences of TEPCO's decisions, the government ought to have the dominant say in how the cleanup goes.

[Brandon Baier]

12:38 PM on 04/01/2011

Because nationalizing power is almost evil. They day the US government says its nationalizing power is the day I grab a weapon and defend my power grid. Power today controls everything, as scary as that is but really think about it, as bad as it still is there without the power they have rerouted it would have blown up along time ago. Water, heat(by way of the computers regulating the gas flow), and all major infrastructures rely on Power. Nationalizing the whole thing is something the whole world might smirk at....MIGHT. Its not neccesarily a bad idea, but I dont know if it would matter really. At the same time, if they did nationalize it, would it be something like GM? I dont know... cars and power are very different when the market is concerned. But in the end its not a bad idea at all, but its gonna raise red flags. :)

[chabuka]

02:27 PM on 04/01/2011

I think if the current administration is going to continue the GOP "Drill baby, Drill" madness, then our oil should be nationalized...too! (Just like Alaska's oil is!) ..Screw the oil companies getting hold of it at no cost and then selling in on the world market, on the commodity market (that Wall Street Bankers are manipulating even as we speak!)...its OUR oil (The People's!)...not the Oil Corporations

[Brandon Baier]

02:34 PM on 04/02/2011

So I dont know what your rave to me was about or why its not post in the actual thread but I think you need to learn to read cause you basically said the same thing I did. I hate the Lobbies and their private corporate interests, it is a direct example of the Fascist rule in America. the Lobbies are too strong. And that was my point that if the current administration nationalized the power I would "DEFEND IT" perhaps I spoke in beguiling fashion and you misunderstood me. I meant that the corporate interest would probably mount up to take it back, like the water rights in Chcocumba, Bolivia. It started a civil war. At the same time I fear that Washington is controlled by the Burueacracy and if Nationalization occurred it would be difficult to keep the Lobbies in check.

I want it a step farther than that if you want to know the truth, I want state soveriagnty restored and the individual oil rights restored to each state, combined with power contributions from solar and non oil producing states it might be a challenge but we are Americans. The free market and the State can co-exist, but the middle class has to stop fighting ammoungst themselves, and remove the boot of the Lobbyist in order for that to happen. Again I am sorry if you misunderstood me, but your rant was dramatically uncalled for. And a quick look at my past comments will enlighten that.

[Brandon Baier]

02:47 PM on 04/02/2011

Furthermore, we wouldn't own anything, your right its or oil, the people's. But in our White House money is what gets votes, even after we elect our leaders, the burueacratics come in and manipulate them with campaign contributions and promises of votes. My fear is that those in the FED already have control of the government, and that a move to Nationalize the oil in America would result in a Fascist state. I may be wrong, but unfortunatly I may be right instead, or aswell. Think about who won the popular vote in the Gore-Bush election. Now add in the burueacratic power displayed in Florida and you might think twice about weather we want to Nationalize everything before we remove the Bureuacratics. Walker in a twisted manner did in fact lay the ground work lol. I say we use his own tactic against them, if the people dont have collective bargaining rights, then niether should the Corporations. Use Walkers agenda to destroy the Bureuacracy, remove all collective bargaining rights, and then establish legislation to protect the working class. Im not a lawyer, but in the interest of equality, it seems like a sound argument, thoughts anyone?

[BobHiggins]

11:43 AM on 04/01/2011

As if the gun nuts in the lege, and the Texas Board of Education weren't doing enough damage in the Lone Star State, Tepco may build nuke plants in Texas.

From Greg Palast: "The Administration, just months ago, asked Congress to provide a $4 billion loan guarantee for two new nuclear reactors to be built and operated on the Gulf Coast of Texas — by Tokyo Electric Power and local partners. As if the Gulf hasn't suffered enough."

Here's the link:
http://www.gregpalast.com/no-bs-info-on-japan-nuclearobama-invites-tokyo-electric-to-build-us-nukes-with-taxpayer-funds/

[Brandon Baier]

02:38 PM on 04/02/2011

Yeah Imagine if a Katrina actually made it inland enough to hit them... Texas would become the next Japan. Although in the interest of curiosity, I wonder what a crab dipped in raw oil then radiated by uranium turns into after its cells mutate on a genetic level, Might be some interesting off spring there.

[BobHiggins]

03:28 PM on 04/02/2011

Blackened Light Sweet Crab encrusted with Alpha Particles may soon be on the specials menu at a Red Lobster near you.

[ButteJbyrd]

11:18 AM on 04/01/2011

Interesting article in Business Week today on Georgia Power's plan to build two new reactors. Seems the state PSC is balking at the utility's plan to place almost all the risk of cost overruns onto the ratepayers.
http://www.businessweek.com/ap/financialnews/D9MA6FF80.htm
Seems the last two Georgia Power reactors, which came on line in 1987 and 1989, were budgeted at $660 million. Final cost: $9 billion.

[termgirl]

12:26 PM on 04/01/2011

Georgia can't even get rid of the waste from the plants currently in operation.
Thank you for the link.

[jokerdanny]

11:09 AM on 04/01/2011

too big to fail, go figure

[espressobeans]

11:06 AM on 04/01/2011

Wow This capitalism is a pretty good deal for everyone except the taxpayer! Push the risk on the little guy and let the big guys keep the bing. Quite the role of government they got rolling out these days.

[themainpoint]

10:31 AM on 04/01/2011

This company owes the whole world much more than they are worth---and clearly should be out of business or in more competent hands.

[termgirl]

12:06 PM on 04/01/2011

They were slated to run the proposed plant in Texas.

[Chris Utzig]

10:29 AM on 04/01/2011

When things get too hairy, the government always steps in. If the market works so well then why can't these industries take care of themselves? How many times do we have to be taught this lesson?

The arguments of market apologists are becoming increasingly absurd in light of growing economic unrest. Corporations are failing as global citizens. At the very least, we NEED effective regulation or else this will continue to happen.

[espressobeans]

11:07 AM on 04/01/2011

Too big to fail and government will step in and use the people's resources to make them even bigger. But we wouldn't want to turn actual control over to the government, that would be nationalism. Just the mop and the pail.

[AFVET65]

09:56 AM on 04/01/2011

A look at the coverup: http://gmanfortruth.wordpress.com/2011/03/31/fukushima-coverup/

[thecreeksedge]

09:44 AM on 04/01/2011

Another government bailout after the private sector screws up on a massive scale. The recurring scenario is all too familiar. What about really effective regulation and oversight before the fact?

[PsyGuy24]

09:40 AM on 04/01/2011

I'm still waiting for the meltdown HuffPo was certain would happen...two weeks ago...

[themainpoint]

10:30 AM on 04/01/2011

"Japanese officials admit the nuclear power complex must now be abandoned and entombed (http://www.dailymail.co.uk/news/art...). The Dailymail published, "officials said it would mean switching off all power and abandoning attempts to keep the nuclear fuel rods cool." The problem with that, of course, is that there are already "three raging meltdowns" under way as Dr. Kaku explains (below). If you abandon efforts to cool the fuel rods, then an accelerated meltdown is "inevitable," says Dr. Kaku."

Learn more: http://www.naturalnews.com/031912_Fukushima_cesium.html#ixzz1IHX2sM9N

[espressobeans]

11:09 AM on 04/01/2011

What the heck do you think happened?

[Chris Herz]

09:01 AM on 04/01/2011

Aha! Another bailout. Just shows that government is the insurer of last resort and the banker of last resort. As of yesterday Moody's has degraded TEPCO to junk status and the stock on the Nikkei has lost 75% of its pre-accident value.

[GreatCornholio]

08:12 AM on 04/01/2011

Is there a benefit to having the government take over at this time?
No, not likely.
With the exception of a giant bulldozer to bury the place, most of the equipment that is needed is already there, along with the workers that have decided that they are going to die there.

So, this turns into TOO LITTLE, TOO LATE japan gov.
Should've listened to the engineers when they said there was not enough tsunami defense back in 09'!

[Last Gasp]

08:40 AM on 04/01/2011

yes there is because the owners only care about liability and future pfoiteering. theyll only do the most profitable action thats good for their bottom line, not for the good of the people.

[kitty0125]

08:40 AM on 04/01/2011

Exactly. It sounds wonderful to those who have no clue that the meltdowns are happening now. Most also have no clue as to the long-term effects of this disaster on the world's food supply. Milk in two states is already tainted with radiation. But don't worry! Politicians will tell you that its good for you! Milk, by itself, isn't good for you...milk with radiation? Well, you figure it out.