|October 01, 2013|
Tokyo Electric set to receive $5.9 billion financing
|Creditors are set to provide $5.9 billion in financing to Tokyo Electric Power Co (Tepco), a person involved in the talks told Reuters on Monday, offering a lifeline to the embattled owner of the crippled Fukushima nuclear plant.|
Tepco's major banks are prepared to provide 500 billion yen ($5.09 billion) in financing in December - 200 billion yen in loan rollovers and 300 billion yen in new financing - said the person, who has been involved in financing talks as a representative of one of the utility's major creditors.
At the same time, Tepco's application on Friday to restart an undamaged nuclear plant helped convince some wavering smaller banks to join a group of 28 financial institutions in rolling over 77 billion yen ($784 million) in loans due at end-October, the person said.
The utility's success in winning a refinancing of the loans due next month was previously reported by the Nikkei and Asahi newspapers. The outcome of the larger funding round due in December has not been previously reported.
Tepco on Friday applied to restart its Kashiwazaki Kariwa facility, the world's largest nuclear plant in northwestern Japan, although approval is uncertain and any restart is many months away.
The company's president, Naomi Hirose, said in an interview published on Sunday that Tepco will likely make its first profit in three years in the year to March - without raising electricity rates or restarting reactors.
Once Asia's largest utility, Tepco has posted more than $27 billion in net losses since the March 2011 earthquake and tsunami triggered nuclear meltdowns at the Fukushima Daiichi plant. Tepco shares have fallen 71 percent since the disaster.
Major Tepco creditors include Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial Group and Mizuho Financial Group, as well as the Development Bank of Japan, leading life insurers and trust banks.
A handful of smaller regional banks had been hesitant to roll over Tepco's October loan as they tried to distance themselves from a utility that has come under renewed public criticism over its handling of contaminated water at Fukushima. Those banks were eventually won over by the firm's application to restart the Kashiwazaki Kariwa facility.
After months of denials, Tepco admitted in July that hundreds of tonnes of contaminated water is flowing into the Pacific Ocean every day. Last month, Tepco said 300 tonnes of water with dangerous levels of radiation had leaked from a storage tank at the Fukushima plant.
Japan has pledged half a billion dollars to deal with contaminated water at the site, and Prime Minister Shinzo Abe has promised the government will take a prominent role in the clean-up.
Tepco shares climbed as much as 2.7 percent on Monday, reversing earlier losses. By the midsession, the stock was up 1.5 percent at 606 yen, while the benchmark Nikkei index was down 1.7 percent. Tepco was the most traded stock by turnover.