Video - BBC World Business Report Tokyo Electric Power Company's share price lost 70% of its value after the earthquake
France24 | The question of a full or partial government takeover of Tokyo Electric Power Co. (TEPCO) has become more pressing in recent days as the company continues to struggle to bring its nuclear reactors at the Fukushima site under control.
As the pressure mounts on the tarnished company, it was reported Wednesday that the utility company’s president Masataka Shimizu has been hospitalised due to high blood pressure and dizziness.
A Japanese government minister reported on Tuesday that the government could impose state ownership on Asia's largest utility. Speaking to a press conference, National Strategy Minister Koichiro Gemba, said that it was “possible to hold various discussions on how TEPCO should function,” and added that the government could step in to pay the hefty compensation bills the company couldn’t cover.
However, confusingly, Chief Cabinet Secretary Yukio Edano told a separate press conference that the government was “not at the moment considering nationalisation,” and TEPCO spokesman Hajime Motojuku told Reuters he was unaware of any nationalisation plans.
TEPCO has lost about $30 billion in market value since the devastating earthquake and tsunami on March 11, which knocked out electricity at its Fukushima nuclear plant site and precipitated the country’s worst nuclear crisis in history.
Compounding costs
The rumours of nationalisation spurred a frantic selloff of TEPCO’s shares on Tuesday and Wednesday. The utility fell 100 yen on the Nikkei Wednesday, the maximum daily limit. The 18 percent drop came after a 19 percent slump a day earlier. Analysts believe that nationalisation could hurt the embattled company’s shareholders, but be good news for its bondholders.
As if the TEPCO's precarious financial position and its workers’ heroic efforts to avert an even uglier nuclear disaster were not enough, the firm is now also struggling with a spiraling PR disaster. The firm was already tarnished by the 2002 scandal involving the fabrication of data during safety inspections of the Fukushima nuclear plant.
“Japanese people don’t expect [TEPCO] to tell the truth,” Philip White, who works for the Tokyo-based anti-nuclear group CNIC, told FRANCE 24. “People are skeptical of what they are hearing from TEPCO and the government, but they do not have other sources of information.”
Radiation worries have been compounded by the rolling blackouts the company has had to enforce in the service area it covers. Nomura Holdings analyst Shigeki Matsumoto said this month that TEPCO will have to pay more than $1 billion every month on alternative fuels to make up for lost power capacity.
France24 | The question of a full or partial government takeover of Tokyo Electric Power Co. (TEPCO) has become more pressing in recent days as the company continues to struggle to bring its nuclear reactors at the Fukushima site under control.
As the pressure mounts on the tarnished company, it was reported Wednesday that the utility company’s president Masataka Shimizu has been hospitalised due to high blood pressure and dizziness.
A Japanese government minister reported on Tuesday that the government could impose state ownership on Asia's largest utility. Speaking to a press conference, National Strategy Minister Koichiro Gemba, said that it was “possible to hold various discussions on how TEPCO should function,” and added that the government could step in to pay the hefty compensation bills the company couldn’t cover.
However, confusingly, Chief Cabinet Secretary Yukio Edano told a separate press conference that the government was “not at the moment considering nationalisation,” and TEPCO spokesman Hajime Motojuku told Reuters he was unaware of any nationalisation plans.
TEPCO has lost about $30 billion in market value since the devastating earthquake and tsunami on March 11, which knocked out electricity at its Fukushima nuclear plant site and precipitated the country’s worst nuclear crisis in history.
Compounding costs
The rumours of nationalisation spurred a frantic selloff of TEPCO’s shares on Tuesday and Wednesday. The utility fell 100 yen on the Nikkei Wednesday, the maximum daily limit. The 18 percent drop came after a 19 percent slump a day earlier. Analysts believe that nationalisation could hurt the embattled company’s shareholders, but be good news for its bondholders.
As if the TEPCO's precarious financial position and its workers’ heroic efforts to avert an even uglier nuclear disaster were not enough, the firm is now also struggling with a spiraling PR disaster. The firm was already tarnished by the 2002 scandal involving the fabrication of data during safety inspections of the Fukushima nuclear plant.
“Japanese people don’t expect [TEPCO] to tell the truth,” Philip White, who works for the Tokyo-based anti-nuclear group CNIC, told FRANCE 24. “People are skeptical of what they are hearing from TEPCO and the government, but they do not have other sources of information.”
Radiation worries have been compounded by the rolling blackouts the company has had to enforce in the service area it covers. Nomura Holdings analyst Shigeki Matsumoto said this month that TEPCO will have to pay more than $1 billion every month on alternative fuels to make up for lost power capacity.
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