Tokyo Electric Power Co (Tepco) faces damages of at least $59bn over the Fukishima disaster and could become a “zombie company” that requires constant government funding.
The damages estimate is contained in a government report reviewing the finances of Tepco ahead of a decision on its future. Prime minister Yoshihiko Noda’s cabinet is keen to avoid bankruptcy proceedings for Tepco, which supplies power to 29 million customers. To qualify for government aid Tepco would have to reform itself, including cutting 7400 staff.
But the leader of Japan’s opposition party is opposed to any bailout. Yoshimi Watanabe told Bloomberg that if Tepco was put into bankruptcy “they can squeeze out at least 5 trillion yen”.
He added that government support would be “simply writing a check to be funded by higher electricity bills and taxes. Tepco will ultimately be a zombie company”.
‘Zombie company’ is a phrase referring to a company kept alive by outside funding.
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