TOKYO: Tokyo Electric Power Co is revising once again its business outlook to assure its creditors it can repay debt built up after the Fukushima disaster as it struggles to restart nuclear operations, according a source familiar with the company’s plans.
Tepco, as the company is called, only survives with taxpayer support following the meltdowns at Fukushima that exposed it to more than $40 billion dollars of compensation claims from those whose livelihoods and households were destroyed by the catastrophe.
It is also facing a tougher business environment as the government moves to open up the electricity industry to full competition from next April. It is the second time it has revised its so-called rehabilitation plan.
The company expects to have 6.6 trillion yen ($55 billion) of debt by next April and has told banks it will remain credit-worthy, according to the source, who is not authorized to speak to the media.
Tokyo Electric Power Co is assuming it will have operating profit of 178 billion yen for the year through March 2016 if it can restart two of its reactors at its Kashiwazaki Kariwa plant from October, according to the source.
That compares with operating profit of nearly 317 billion yen in the financial year just ended.
The timetable for restarting reactors at the seven unit Kashiwazaki Kariwa plant, the world’s biggest nuclear station, is likely to be difficult because regulators are focusing their main efforts on approvals for other units and because of stiff opposition from the governor of the prefecture where the station is located.
“Given significant public opposition, restarting its reactors at Kashiwazaki Kariwa remains uncertain,” Moody’s said after Tepco announced earlier this month it would change to a holding company structure from next April.
“Without the restart, Tepco may need to apply for additional rate increases to achieve stable and sustainable profitability in the future despite continuous cost reductions,” Moody’s said.
Tepco has drafted successive recovery plans to restore its finances after the worst nuclear disaster since Chernobyl in 1986, which led to its takeover by the government in 2012.
The most recent plan agreed by the government in January hinged on Tepco restarting Kashiwazaki Kariwa, to cut fossil fuel costs.
The utility also plans to sell some of its uranium fuel to raise money, Kyodo reported on Monday.
