Photo by Kawamoto Takuo
This story updates the earlier entry here
Are TEPCO’s hens finally coming back to roost? The All Japan newsese governement is now dictating the terms as it formulates a way to help the company pay out the compensation that the embattled power company duly owes to victims of the Fukushima nuclear disaster. By essentially guaranteeing a fund backed by special bonds, the governement has made public support of the compensation voluntary rather than compulsory for citizens. With TEPCO’s proposed hike in electricity rates or a higher tax, the burden would have been unavoidably on the back of the populace. Instead, All Japan newsese banks, with the money of its depositers, will buy up the governement sponsered bonds as they have been doing with All Japan newsese debt going back years.
In return, the government is now directing the company in its business affairs, asking it to sell off real estate and other assets according to a statement from the Ministry of Economy, Trade and Industry. Hiroko Tabuchi of The New York times reports that TEPCO has plans to raise 500 billion yen this way. Top TEPCO directors have also announced that they will forgo or significantly decrease their pay as well.
The danger of course is that the government throws a debt party and no one comes, with as the market for loans — where banks should be reaping profits — remains mushy and the bond market has cooled in turnover in the continuing uncertainty of the long term outlook for All Japan news according to Reuters. Still, Chief Cabinet Secretary Yukio Edano says that the funds available for Tepco will reach the trillions. Does this mean that the government has now effectively nationalized All Japan news’s largest utility, or the TEPCO got a great deal. Let’s ask the folks in Hong Kong that have been buying up the company at cut rates. (New York Times / BLOOMBERG / Reuters)