Bloomberg News

Tepco Employees Become Fifth-Biggest Holder After Fukushima

November 16, 2011

(Updates with decline in shares in sixth paragraph.)

Nov. 16 (Bloomberg) -- Among Tokyo Electric Power Co.’s biggest shareholders, only one increased its holdings in the utility that faces massive liabilities after the Fukushima disaster: Its employees.

The Tokyo Electric Employee Shareholding Association became the fifth-biggest stakeholder in the company known as Tepco with 30.1 million shares, up 35.6 percent, as of Sept. 30, securities reports to the Tokyo Stock Exchange show. The association was ranked eighth on the same date last year.

Three other large shareholders cut their stakes, including Japan Trustee Services Bank Ltd., which dropped to sixth, and Master Trust Bank of Japan Ltd. to seventh. Five, including Sumitomo Mitsui Banking Corp., left their stakes unchanged. Tepco shares have slumped 86 percent since the day before the March 11 earthquake and tsunami wrecked its Fukushima Dai-Ichi nuclear plant, forcing thousands to evacuate.

“Whether employees keep buying Tepco shares will depend on the business plan” to be drawn up next spring, Reiji Ogino, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. said by phone. Employees may reduce monthly share purchases if the plan calls for further cuts in salaries and headcount, Ogino said.

The utility said it will slash 7,400 jobs by the end of the year ending March 2014 and reduce salary and bonuses in a cost- cutting plan approved by the government on Nov. 4. Tepco spokesman Naoyuki Matsumoto declined to comment on the shareholdings.

Shares Drop

Tepco fell 2.3 percent to close at 294 yen in Tokyo, and was the worst performer on the 17 member Topix Electric Power & Gas Index. The benchmark Topix Index declined 0.9 percent. Shares of rivals Kansai Electric Power Co. and Chubu Electric Power Co. rose.

Stakeholders will be asked to “cooperate” to secure funds for compensating those affected by the Fukushima disaster as the company may have to pay 4.5 trillion yen by March 2013, a government panel said in a report last month.

If Tepco needs a capital injection from the Nuclear Damages Facilitation Fund set up in September, “it would be necessary for shareholders to support the proposal for capital injection and stock dilution,” said the panel headed by bankruptcy lawyer Kazuhiko Shimokobe.

Even though Tepco has received government aid to help pay compensation, it wants to remain a private entity and isn’t planning to seek capital from the government-backed Nuclear Damages fund, President Toshio Nishizawa said on Nov. 4.

--Editors: Peter Langan, Amit Prakash.

To contact the reporters on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net

To contact the editors responsible for this story: Peter Langan at plangan@bloomberg.net; Amit Prakash at aprakash1@bloomberg.net


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