Japan's Tepco set for $13 billion bailout: sources
By Kentaro Hamada and Linda Sieg
TOKYO (Reuters) - The owner of Japan's stricken nuclear reactor, Tokyo Electric Power Co, will agree to be taken over by the government in a near-$13 billion bailout, sources said on Thursday, even as the country debates the future of nuclear power.
The injection of 1 trillion yen ($12.8 billion) in public funds would effectively nationalize Tepco (9501.T: Quote), supplier of power to almost 45 million people including Tokyo residents, in one of the world's biggest bailouts outside the banking sector.
Tepco has been dragging its feet over a proposal for the state-backed Nuclear Damage Liability Facilitation Fund to take at least a two-thirds stake in the company, which has been swamped by liabilities associated with the earthquake and tsunami which ruined its Fukushima nuclear power plant in March.
"If the government has a two-thirds stake, they have a right to control management, so naturally, Tepco doesn't like that," said one source familiar with the matter.
Tepco's future as an independent firm has been in doubt since the disaster, which triggered the world's worst nuclear crisis in 25 years and left the utility with huge compensation payments, cleanup costs and rising fuel bills as public concerns over safety make it hard to restart other off-line reactors.
Its plight has become emblematic of problems facing Japan's entire nuclear power industry, much of which has been idled since the disaster while authorities work to regain some public trust in an industry that had provided a third of Japan's power.
Tepco's fate is also being watched for clues as to whether Japan will deregulate its system of monopolistic regional utilities that both generate and distribute electricity.
Tepco's share price soared on the news, jumping 8 percent in heavy trade to 219 yen. Continued...