NYT: On Thursday, shares in Tokyo Electric again fell to a record low, at one point slumping to 148 yen ($1.85), down 93 percent from prequake levels. Shares finished at 192 yen ($2.40), down 4 percent from the previous day, and the company already had a 1.25 trillion yen loss in the year ending March 31, the largest annual loss for a nonfinancial institution in Japanese history.
The physical damage from the accident at the Fukushima Daiichi nuclear power plant has been so widespread that even conservative estimates of compensation claims amount to tens of billions of dollars — a burden that could render Japan’s largest utility insolvent….
….
And banks were so certain of this that they agreed, in early April, to lend almost 2 trillion yen ($25 billion) to the struggling utility company. In the eyes of the market, Tokyo Electric was too big to fail.
Now, three months later, the market is not so sure.
…. Meanwhile, the head of the Tokyo Stock Exchange, Atsushi Saito — who was once the president of a state-sponsored organization that assisted ailing companies, — shocked investors when he suggested in an interview last week with local media that Tokyo Electric should go through court-led restructuring, similar to the path Japan Airlines had taken since declaring bankruptcy last year.
Tokyo Electric is Japan’s biggest corporate bond issuer, representing about 8 percent, or about 5 trillion yen, of the country’s 70 trillion yen corporate bond market. And because many of Japan’s largest banks hold shares in Tokyo Electric, they have already taken a direct hit from the utility’s difficulties.
The Tokyo Metropolitan Government owns about 3 percent of Tokyo Electric’s shares, and the city’s finances have been thrown into disarray as share prices plunge and dividends are canceled.
Tags: Fukushima cosequences, TEPCO insolvency, Tokyo Electric Power Company
The k2p blog 