TEPCO To Be Partially (For Now) Nationalized

Tyler Durden's picture

Well, as we first supposed three weeks ago when the stock was 80% higher, the CDS was in double digits, and the "situation was contained", TEPCO is about to be nationalized. According to the Mainichi newspaper Japan's government plans to take control of Tokyo
Electric Power Co , the operator of a stricken nuclear power plant, by
injecting public funds. However, it appears that Japan has learned a thing or two from Tim Geithner and the concept of partially pregnant: "
But the government is unlikely to take more than a 50 percent stake in the company, an unnamed government official was quoted by the daily as saying. "If the stake goes over 50 percent, it will be nationalised. But that's not what we are considering," the official was quoted by the paper as saying." To semi-quote Hans Gruber: you asked for miracles, I give you... the Japanese government. Nonetheless, how the government will deal with what is now an official groundwater spill of radiaction is beyond us.

More from Reuters:

The company, also known as TEPCO, has come under fire for its handling of the emergency at its Fukushima Daichi nuclear complex, triggered by a March 11 earthquake and tsunami that left more than 27,500 people dead or missing.

Mainichi quoted an unnamed government official as saying: "It will be a type of injection that will allow the government to have a certain level of (management) involvement."

A series of missteps and mistakes, combined with scant signs of leadership, have further undermined confidence in the company. Poor communication has led to some heated exchanges in media conferences as journalists demanded information.

TEPCO could face compensation claims topping $130 billion if Japan's worst nuclear crisis dragged on, Bank of America-Merrill Lynch estimated this week, further fuelling expectations Japan's government will step in to save Asia's largest utility.

Investor concern about the future of Tokyo Electric mounted after its president, Masataka Shimizu, was admitted to hospital and the company said on Wednesday that 2 trillion yen ($24 billion) in emergency loans from Japan's major banks would not cover its mounting costs.