Dec. 30 (Bloomberg) -- Sumitomo Mitsui Financial Group Inc., the main lender to Tokyo Electric Power Co., will consider additional loans to the utility on three conditions, including that the embattled company not request debt waivers.
Any new loans to Tepco, which has reported losses of about 1.8 trillion yen ($23 billion) related to the Fukushima nuclear disaster, will also require the utility to make uninterrupted compensation payments to those who lost homes and livelihoods because of radiation fallout.
The other condition is the utility maintain sound business practices, said a bank spokesman, who declined to have his name used, citing company rules. He gave no specifics on what those practices are and added the three conditions were explained by Koichi Miyata, Sumitomo Mitsui’s president, in interviews with local media this month.
Tepco shares are trading at the lowest in 60 years, or since they were listed in 1951, and have lost about $40 billion in market value since March 10, the day before an earthquake and tsunami wrecked its Dai-Ichi reactors. The stock is the worst- performer this year on the MSCI Asia Pacific Index.
Miyata’s remarks follow those in September of Katsunori Nagayasu, chairman of the Japanese Bankers Association and Mitsubishi UFJ Financial Group Inc. He expressed bank support for the utility so long as it didn’t request forgiveness of loans.
Tepco is considering asking banks for 1 trillion yen worth of additional loans to pay for the rising cost of fuel for thermal-power plants, the Asahi Shimbun said today without citing anyone.
The utility is now dependent on aid from the state-run Nuclear Damages Facilitation Fund to stay in business. This week, the utility requested 689.4 billion yen ($8.9 billion) in additional aid from the fund.
Japan’s Economy, Trade and Industry Minister Yukio Edano told the company’s management this week it should consider being nationalized.
--Editors: Peter Langan, Aaron Sheldrick
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