The Japanese government has agreed to bail out beleaguered utility Tokyo Electric Power Co (Tepco) to the tune of 900bn yen ($11.5bn).
Tepco operates the Fukushima nuclear plant and faced bankruptcy after an earthquake and tsunami in March crippled the plant’s reactors, resulting in the company facing massive compensation claims.
Tepco has now forecast an annual loss for this year of 600bn yen and as part of the bailout deal has agreed to axe about 14 per cent of its workforce and make significant cost cuts over the next decade. Last year the company recorded a profit of 92bn yen in the six months to 31 September.
Japan’s prime minister Yoshihiko Noda said in parliament this week that he wants Tepco to “speedily” pay compensation to victims of Fukushima.
Tepco is expected to have to pay 1.02 trillion yen by next March in compensation to those affected by the disaster, and it is anticipated by the government that this could rise to 4.5 trillion yen in two years’ time.
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