Oct. 28 (Bloomberg) -- Tokyo Electric Power Co. will ask the government for 900 billion yen ($12 billion) to avoid bankruptcy, the Nikkei newspaper said, the first state support since the Fukushima nuclear disaster almost eight months ago.
Trade and Industry Minister Yukio Edano may sign off on a finance plan for the company known as Tepco as early as next week, the Nikkei said. Tepco will commit to cutting costs by 240 billion yen and raising as much as 400 billion yen from asset sales by the end of March, the paper said. Executives of the company at the center of the worst nuclear crisis since Chernobyl will agree on the plan today, the Nikkei said.
The aid will be the first disbursement from the Nuclear Damage Liability Facilitation Fund that was set up last month. Tepco and the fund have been drafting a business plan to pave the way for government support for the utility, which may have to pay 4.5 trillion yen in compensation to residents and businesses hurt by the disaster by March 2013.
Tokyo Electric’s Fukushima Dai-Ichi atomic plant has been discharging radiation since the March 11 earthquake and tsunami knocked out cooling systems, causing three meltdowns and explosions. The catastrophe forced 160,000 people to flee radiation and damaged fishing, farming and forestry businesses.
As well as ensuring those affected receive compensation, the government is trying to avert the bankruptcy of a company that supplies power to 29 million customers in the political and economic heart of Japan.
Tepco may face 8.6 trillion yen in funding shortages during the next decade if none of its nuclear power plants come back online and electricity prices aren’t increased, a government panel said earlier this month after reviewing the company’s finances.
--Editors: Aaron Sheldrick, Teo Chian Wei
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