1 trillion yen for TEPCO on July 25

May 22,2012

TEPCO to be nationalized July 25, gov't to acquire up to 75% stake

http://mainichi.jp/english/english/newsselect/news/20120522p2g00m0dm011000c.html

TOKYO (Kyodo) -- The government will effectively nationalize Tokyo Electric Power Co. on July 25 by injecting 1 trillion yen in public money into the nation's biggest utility facing huge costs stemming from the Fukushima Daiichi nuclear power plant disaster, Tokyo Electric said Monday.

The government will initially acquire 50.11 percent of the company's voting rights, enabling the state to choose the board members, and will be able boost the government ownership stake to up to 75.84 percent for even stronger control in pushing for reforms.

To effect the changes, TEPCO plans to change its articles of incorporation at its annual shareholders' meeting on June 27 to allow it to increase its authorized shares from 1.8 billion now.

TEPCO will then issue two new types of preferred shares -- one carrying voting rights, and another with no such rights but convertible to common shares with voting rights.

The state-backed Nuclear Damage Liability Facilitation Fund will pay the 1 trillion yen to TEPCO on July 25, and in return acquire 1.6 billion preferred shares with voting rights for 200 yen each and 340 million convertible shares for 2,000 yen each.

TEPCO also intends to cut more than 3.37 trillion yen in costs over 10 years to March 2022, and carry out various reforms in line with a restructuring plan approved by the government earlier this month.

The government will start recouping the 1 trillion yen in taxpayer money once the fund sees progress in reforming the company, or judges the company capable of raising funds through the corporate bond market.

Because of the changes, the Tokyo metropolitan government, the current largest shareholder, will see its stake halved to 1.34 percent, from 2.68 percent at the end of March. The stake could fall to 0.65 percent in the future.