(MENAFN- Kuwait News Agency (KUNA)) The Japanese government will control up to 75.84 percent of Tokyo Electric Power Company (TEPCO), the operator of the crippled Fukushima Daiichi nuclear power plant, after providing a capital injection of JPY 1 trillion (USD 12.6 billion).
TEPCO will receive the capital injection from the state-backed Nuclear Damage Liability Facilitation Fund, and in exchange, the compensation fund will initially acquire 50.11 percent of the company's voting rights, with an option to take 75.84 percent of the control, the utility said Monday. TEPCO will then issue 1.6 billion convertible preferred shares with voting rights and 340 million convertible shares without voting rights to the fund by July 25.
The public bailout for TEPCO is part of a 10-year restructuring plan, which was approved earlier this month, to help the country's biggest utility.
Voting shares worth JPY 320 billion (USD 4 billion) and the non-voting convertible shares JPY 680 billion (USD 8.6 billion). The government will effectively nationalize TEPCO, which is facing massive compensation to those affected from the Fukushima nuclear accident in March last year.
The Fukushima nuclear plant, 230 kilometers north of Tokyo, was severely damaged by tsunami triggered by the magnitude 9.0-earthquake and 15-meter tsunami in March that hit the northeastern region. The twin natural disasters knocked out the plant's cooling systems, causing reactors to overheat and radiation leaks.
The worst nuclear disaster since the Chernobyl catastrophe in 1986 has also forced about 160,000 residents around the plant to evacuate and damaged the agriculture, livestock and fishery industries in the region.
Besides compensation costs, TEPCO currently relies on relatively expensive fossil-fuel-fired plants to make up for nuclear capacity in the wake of the Fukushima accident. The utility is also expected to face huge expenses stemming from scrapping the Fukushima plant's four crippled reactors, which could take more than 30 years.
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