Sources have said that Tokyo Electric Power Co (TEPCO), the utility operator of the crippled Fukushima Daiichi nuclear plant, is set to ask their creditor banks to change some of their loans to uncollateralized status by next fiscal year. This is reportedly due to the fact that they want to prioritize paying compensation to those who were affected by the 2011 nuclear meltdown, considered one of the worst accidents in recent times.
If loans are collateralized, TEPCO would have to prioritize paying the banks rather than allotting their earnings to compensation payments for residents who are still displaced due to the ongoing decontamination efforts at the Fukushima plant. The company would probably not want to receive even more criticism that they are giving more importance to their creditors rather than the victims. This negative impression may also prevent government plans to increase aid to TEPCO by using public funds.
The reports say that TEPCO will submit formal requests to the financial institutions by the end of this month, which will also include their turnaround plan to bring back the creditors’ confidence in the company. Before the 2011 crisis, the company had a high credit rating and so they were able to easily get unsecured loans. But the nuclear accident has understandably affected their credit balance and as they are unable to issue corporate bonds, they are now highly dependent on loans from institutions. They were able to receive 2 trillion yen of emergency loans immediately following the meltdown, but they had to switch to collateralized privately placed bonds due to a spike in their debts. Banks will still be overly cautious as it is still unsure whether their other nuclear plant, Kashiwazaki-Kariwa in Niigata Prefecture will be able to restart their reactors by next year or even 2016.
[ via Yomiuri Shimbun ]
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