TEPCO DEFAULT?
¥2.5T
TEPCO to default on DEBTS and Long Term Leases? Where will the ¥2.5T come from?
http://mdn.mainichi.jp/mdnnews/news/20111024p2g00m0dm105000c.html
Industry minister Yukio Edano on Monday instructed TEPCO to cut 2.5 trillion yen in costs before receiving funds to help it pay compensation over the nuclear crisis. The economy, trade and industry minister is in a position to approve the special business plan, which would include cost-cutting and other restructuring measures. Tokyo Electric President Toshio Nishizawa told reporters after his talks with Edano, "We will take the minister's words sincerely and steadily implement (what we are told to do)."
TEPCO requested to the Ministry 120 billion yen in government compensation, the maximum amount set by a contract between the government and TEPCO for an accident at one nuclear power plant. The utility's compensation payments have exceeded 150 billion yen.
(Mainichi Japan) October 24, 2011
http://www.zerohedge.com/article/tepco-91-billion-debt-got-cds
TEPCO has over $90 billion in debt and roughly $30 billion in equity buffer. Bruce Krasting points out the equity - is gone. It's all long term leases. The actual debt behind the power plants is multiples of what they show on the balance sheet."
http://seekingalpha.com/author/bruce-krasting
http://www.businessinsider.com/author/bruce-krasting
Stockholder Derivative Lawsuits
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Request TEPCO auditors to sue board members over the past 20 years, including incumbent chairman Tsunehisa Katsumata.
If the auditors fail to do so within 60 days, the shareholders will file.
http://mdn.mainichi.jp/mdnnews/news/20111105p2g00m0dm011000c.html
TOKYO Some 30 shareholders of Tokyo Electric Power Co. are set to file a lawsuit against about 60 current and former directors of the utility, demanding that they return a total of 1.1 trillion yen to the company as their negligence in safety resulted in the nuclear crisis at its Fukushima Daiichi power plant.
1st of MANY
The First of Many ...
"expected to be the first of many over the coming years aimed at preventing cash shortages or capital deficits at Tepco"
http://online.wsj.com/article/SB1000142405297020371620457701701340160933...
Tepco Gets $12.8 Billion Bailout
Wall Street Journal - By MITSURU OBE And KANA INAGAKI - NOVEMBER 4, 2011
With the aid package in place, expected to be the first of many over the coming years aimed at preventing cash shortages or capital deficits at Tepco, the company said it now expects a net loss of ¥600 billion for the fiscal year through March, releasing a full-year earnings outlook for the first time this year.
Earlier in the day, the government agreed to provide some ¥1 trillion in public funds to help the utility pay for compensation claims to people and businesses affected by the nuclear disaster triggered by the March 11 earthquake and tsunami. An independent government panel predicted last month that compensation expenses alone could reach ¥4.5 trillion over the next two years, and could increase further.
The provision of public funds is expected to be only the first of many installments to come over the coming years. An independent government panel predicted last month that compensation expenses could reach ¥4.5 trillion in just two years, and could increase more.
As well as the full-year net loss forecast, Tepco said it also expects an operating loss of ¥305 billion on revenue of ¥5.315 trillion.
A Bottomless Pit
:(
TEPCO is a bottomless pit of: disinformation, disease, deceipt, destruction, distortion and death!
:(
Booked ¥543.6 billion Gain
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Tepco booked a 543.6 billion yen gain from the bailout in its six-month results.
http://www.businessweek.com/news/2011-11-04/japan-starts-tepco-bailout-a...
Japan Starts Tepco Bailout as Fukushima Causes More Losses
Bloomberg November 04, 2011, 6:24 PM EDT By Tsuyoshi Inajima and Yuji Okada
TEPCO won approval for an $11.5 billion bailout from the government after the Fukushima nuclear catastrophe to avert bankruptcy and start paying compensation for the crisis. The government of Prime Minister Yoshihiko Noda is stepping in to ensure residents, farmers, fishermen and forestry businesses are properly compensated by a utility that supplies power to 29 million customers in the political and economic heart of Japan. Tepco may need more aid after March 2013, said Takashi Aoki, who helps manage 120 billion yen at Tokyo-based Mizuho Asset Management Co.“Tepco may wipe out its net assets of 708.8 billion yen by the end of next fiscal year”.
“Tepco must compensate those affected with sincerity and generosity as well as carry out a thorough reorganization,” Edano said today in Tokyo. Japan’s Prime Minister Noda said in Parliament on Nov. 2 he wants Tepco to “speedily” pay compensation to victims of the Fukushima nuclear disaster. The company must draw up a “comprehensive” business plan by next spring that fulfills the three goals of full compensation, keeping the power on and resolving the Fukushima crisis. The issue of whether the board must resign to take responsibility will also be considered in the plan.
Tepco booked a 543.6 billion yen gain from the bailout in its six-month results.
Book a Gain?
OK, so HOW DOES TEPCO book a GAIN on a loss and a loan?
http://www.businessweek.com/news/2011-11-04/japan-starts-tepco-bailout-a...
"Tepco booked a 543.6 billion yen gain from the bailout in its six-month results."
TEPCO LOSS $7.5B FY-2011
TEPCO "expects to lose nearly $7.5 billion for the current fiscal year."
http://www.voanews.com/english/news/asia/Japan-Allocates-Public-Funds-to...
“Tokyo Electric announced Friday that it expects to lose nearly $7.5 billion for the current fiscal year (which ends in March). The power company says it will incur the loss even after receiving the more than $11 billion in public funds.”
Tepco Faces Insolvency
:(
Nikkei Says Tepco Faces Insolvency Without Nuclear Reactors,
http://www.bloomberg.com/news/2011-09-27/tepco-needs-reactor-restarts-or...
By Tsuyoshi Inajima - Sep 27, 2011 1:52 AM CT .
Tokyo Electric Power Co. needs to restart nuclear reactors or raise electricity prices to avoid insolvency from Fukushima compensation costs of more than 4 trillion yen ($52 billion), Japanese media reported. Shares in the utility known as Tepco fell 6.2 percent to close at 243 yen in Tokyo, the lowest since June 13. The stock, which dropped as much as 17 percent, was the biggest decliner among members of the Nikkei-225 (NKY) Stock Average. The same panel estimated the cost of compensation to those affected by the Fukushima nuclear disaster will exceed 4 trillion yen, Kyodo News reported, without saying how it got the information.
Tepco withdrew a plan to raise electricity rates by as much as 15 percents after receiving criticism from the panel members, Kyodo reported. The utility overestimated costs used to calculate tariffs for its customers for the decade since 1998, Kazuhiko Shimokobe, a lawyer and the chairman of the committee overseeing the company’s finances, said.
TEPCO is upside-down
;)
TEPCO is upside-down … Big Time
http://www.bloomberg.com/news/2011-10-27/tepco-to-ask-for-12-billion-fro...
The aid will be the first disbursement from the Nuclear Damage Liability Facilitation Fund that was set up last month. Tepco and the fund have been drafting a business plan to pave the way for government support for the utility, which may have to pay 4.5 trillion yen in compensation to residents and businesses hurt by the disaster by March 2013.
http://ajw.asahi.com/article/0311disaster/fukushima/AJ2011102916094
TEPCO's request for 890 billion yen does not include the 120 billion yen the government is obligated to pay in the insurance system stipulated under the law on compensation for nuclear damage.
TEPCO's net assets are expected to be worth 708.8 billion yen at the end of fiscal 2011, a level in which its debts could exceed its assets.
'Plan' is DUE Oct. 31
If memory serves, the TEPCO 'special business plan' is due on October 31, 2011. If that is Japan time, they are already in default. If NY time, the clock is ticking.
http://www.tepco.co.jp/en/news/topics/11102701-e.html
Regarding media reports of TEPCO's financial result and special business plan
October 27, 2011 - Tokyo Electric Power Company
Although some media released the news report regarding TEPCO's financial result and special business plan today, these are not published by TEPCO. In this regard there are nothing determined at this moment.
The financial result for the second quarter of FY2011 is currently being compiled. We will announce the schedule as soon as it becomes clear.
With regard to the development of the special business plan, we are now proceeding with the preparation jointly with the Corporation in Support of Compensation for Nuclear Damage. At this moment no concrete contents have been decided.
We deeply apologize to the public for the anxiety and inconvenience caused by the accident of the Nuclear Power Station.
Reckless Creditors
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Let the Players Pay
TEPCO is already ‘JUNK’, so why should taxpayers, electrical customers and downwinders bail out reckless lenders? What is Moody's going to do, downgrade JUNK? Some threat that is. OF COURSE Moody's shills for the lenders. Who would expect anything else?
http://www.reuters.com/article/2011/10/07/tepco-moodys-idUSL3E7L70V72011...
Moody's cut Tepco's credit rating to junk status in June lowering its senior secured credit rating to Ba2 from Baa2 and its long-term rating to B1 from Baa3. In its report on Friday the agency said it continues to have a negative outlook on the utility.
To lessen the burden on taxpayers the utility has come under pressure to ask banks to waive a portion of their loans.
http://myfukushima.info/2011/10/08/taxpayers-not-banks-should-pay-for-te...
“Moody’s wants taxpayers to pay for TEPCOs debt, rather than the banks that took the risk of lending TEPCO the money in the first place.”
Firewall TEPCO
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TEPCO owning up to a 14.3T Yen shortfall. The worst reactor safety record on Planet Earth has destroyed TEPCO. The investor, lender, lessor, partner and speculator groups working with TEPCO, should face a 100% default plus a share of the damages. Such market and regulatory discipline will improve future nuclear utility due diligence. The losses should be borne by the players.
http://news.businessweek.com/article.asp?documentKey=1377-aU0Q_.iiQnvY-4...
Oct. 7 (Bloomberg)
TEPCO may have a funding shortfall of 8.6 trillion yen according to a government panel investigating the utility's finances.
The panel, formed after the nuclear accident and headed by lawyer Kazuhiko Shimokobe, also estimated Tepco is exposed to at least 5.7 trillion yen in compensation payments and decommissioning costs for Fukushima reactors.
There were no bond sales announced by nuclear plant operators in Japan since the quake, Bloomberg data show.
As of Oct. 6, only 10 of the country's 54 nuclear reactors were generating power, according to Japan Nuclear Technology Institute data.
Investor Services
;)
Well duh read the name on the sign.
Investors Services not Taxpayers Services.
But of course, Moody’s Investors Service, Inc. wants to hose taxpayers and electrical power customers for Trillions of dollars.
The name is Moody’s Investors Service, Inc. NOT Moody’s Taxpayers Service, Inc.
Privatizing gains and socializing losses is the WORST possible economic system and ALL too common today.
Deadly Penny Pinching
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Cutting corners caused this disaster
The ‘financial geniuses’ that encouraged this cost cutting should be rewarded … with NOTHING! S&P has already slashed TEPCO JUNK again.
Criminal investigations of TEPCO, E&Cs, partnes, lessors and creditors is already long overdue.
http://wn.com/Tepco__Downgraded_stock_to_High_Risk_status
Rating agency recognising the inevitable. The tragedy is the population of Japan will pay the financial cost plus the world-wode environmental devastation
TEPCO is flat busted
:(
The utility needs the first tranche of government aid to avoid having a negative net worth.
http://www.japantoday.com/category/national/view/tepco-asks-for-reported...
National Oct. 29, 2011 - 06:55AM JST ( 0 )
The Yomiuri daily reported that TEPCO needed a trillion yen “for the time being,” indicating that the embattled company may go cap in hand to the government for more help later.
The utility is looking to receive the first tranche from a government-backed aid body so it can avoid having a negative net worth on its April-September balance sheet, local media reported. The utility also submitted an emergency business plan to Prime Minister Yoshihiko Noda and Trade Minister Yukio Edano, who supervises the energy industry, it said. The plan outlines cost cuts, asset sales and other restructuring steps required to help it meet compensation costs—estimated by a government panel at 4.5 trillion yen by 2013—and secure further state help.
The disaster has soured the mood among the Japanese public over nuclear power, with many worried about the health effects of the technology, which until March had provided a third of resource-poor Japan’s electricity.
TEPCO Losses?
…
What loss will TEPCO creditors sustain?
http://www.japantoday.com/category/world/view/obama-calls-for-firewall-t...
At Wednesday’s Brussels summit, EU leaders cut a crucial deal in a concerted attempt to resolve the eurozone debt crisis, prevent contagion in the likes of Italy and Spain, and avoid another painful global recession.
Banks will take a 50% loss on their holdings of Greek debt to lessen Athens’ burden.
Obama SHILL
?
Why is Obama shilling for TEPCO security prices?
?
Imprudent Decisions
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TEPCO creditors made some imprudent decisions.
These bad decisions have created a vast wasteland in Japan and the Northwest Pacific Ocean. The economic damages greatly exceed the cost of the failed nuclear plants. The cleanup costs and public health financial impacts are immense. Thus the stockholders, bondholders, banks, lessors and venders can expect to suffer greater than 100% losses on their investments. A mere loss of interest or even a total loss of investment will not scratch the surface of the total damages done.
Who better, to bear the costs, than those who sought to gain by these imprudent decisions?
INCORRECT!!
Thus the stockholders, bondholders, banks, lessors and venders can expect to suffer greater than 100% losses on their investments.
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When you buy a stock, your exposure is limited to the price of the stock.
Nothing more. They can't come after investors for more money.
When a company runs out of money, it is out of money. Bankrupt. Period.
Haven't you ever heard of creditors collecting "pennies on the dollar"?
That means the creditors absorb the loss. In this case, creditors and future creditors from liability cases will also have to eat the loss.
Pony UP
Gross negligence and criminal negligence can create losses greater than 100%, for management, Boards, Partners, Lenders & Lessors.
Better them, than the consumers, customers and taxpayers.
Pony Up
INCORRECT
Again, it doesn't matter at all what the management does, whether it is criminal or whatever. The exposure of investors is limited to their investment - no more.
For example, look at Enron. Do you remember that? Some of the high ranking officials did nefarious things, and were sent to jail. The failure of Enron caused losses in excess of the company's valuation.
However, could those who suffered financial loss at the hands of Enron sue the investors for money in excess of what they paid to buy the stock.
NO - NO WAY!!
That's what the laws that govern the incorporation of corporations are all about. The investor's exposure is limited to their investment. That's all
Laissez Faire Capitalism
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market discipline
Perhaps Japan should provide TEPCO investors, lenders and lease-holders a full measure of market discipline. A laissez faire capitalism solution would offer substantial long-term advantages to electrical power customers and Fukushima Daiichi downwinders.
It is quite proper for bad decisions to produce adverse consequences. TEPCO is bankrupt, many times over. The Japanese government has agreed to assist.
It is time to ‘deal the bad boys out’.
You put your money down, and lost the wager.
Cover your bets
:{}
Go and take nothing ...
Perhaps 'Market Discipline' will reverse the decline of Western Civilization. The West is careening toward socialism and National Socialism (Fascism).
The rigors of free market enterprise will weed out the unfit.
The 'market share' allocation process is too decadent for words.
The citizens and subjects of the Western nations can do better ...
Much better
Enervated Tepco
The new enervated Tepco
If worse comes to worst, Tepco share certificates would become worthless sheets of paper for 600,000 shareholders as well as for many corporate pension funds that have included Tepco stock in their portfolios. The steep drop in Tepco's stock price has already dealt a blow to investment funds in the United States. Nearly 20 percent of its stock is held by non-Japanese investors. This has reportedly led the Obama administration to urge the Kan government to take steps to prevent a further decline in Tepco stock.
Tepco is now attempting to divert public opinion away from its responsibility for the nuclear crisis to the need to secure a stable supply of electricity. Shortly after its Fukushima power station was damaged, the company announced that it would have to impose "planned rolling power outages" to make up for reduced power generation.
By emphasizing that abandoning nuclear power generation would lead to prolonged outages, Tepco sought to convince the public that it is better to rely on nuclear power generation than endure power outages and that it is time to help Tepco with public funds. This is an ultimate form of defiance by Tepco.
http://www.japantimes.co.jp/text/eo20110516a1.html
Obama LUV TEPCO?
So why does Obama give a hoot about TEPCO stock prices?
Looming Default
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Partial debt waiter will trigger a default status
http://www.reuters.com/article/2011/10/07/tepco-moodys-idUSL3E7L70V72011...
Oct 7 (Reuters) - Moody's Investors Service said on Friday it would likely view any agreement forced on lenders to waive part of Tepco debt a default that would prompt it to cut the utility's credit rating by several notches. A government panel reviewing restructuring efforts at the utility, commonly known as Tepco, recommended this month cost cuts of 2.5 trillion yen ($33 billion) over a decade and left open the possibility that the company may seek more cooperation from lenders.
A nuclear contamination clean-up and other expenses may leave the utility in need of more than $110 billion of funding, the government panel estimated. To lessen the burden on taxpayers the utility has come under pressure to ask banks to waive a portion of their loans.
WAIVER
Partial debt WAIVER will trigger ...
Hypothetically Speaking
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¥48T damages - or $20T
http://mdn.mainichi.jp/mdnnews/news/20111025p2g00m0dm103000c.html
A future nuclear accident in Japan could raise the cost of power generation by between 0.1 and 1 yen per kilowatt-hour, a government research panel said Tuesday. It is the first time that the country has calculated the costs that could stem from a nuclear accident. The figure equates to a rise of between 120 yen and 1,200 yen in average household electricity bills annually.
The panel's secretariat estimated that the damage cost of a nuclear plant accident will reach 3.89 trillion yen, which includes compensation payments for people and companies affected by an accident and costs of decommissioning nuclear reactors. Spending for cleaning radiation-contaminated areas is not included, and it is difficult to further project additional costs at this moment, But the panel head, Tatsujiro Suzuki said in his draft paper that summarized the panel's discussion.
Hideyuki Ban, a panel member from an antinuclear civic group, said that the damage costs estimate is too low, saying that it could be 48 trillion yen when spending on decontamination work is included.
$13B - At Least
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more money … next year
http://topics.nytimes.com/top/news/international/countriesandterritories...
World Briefing | Asia By REUTERS Published: October 21, 2011
Prime Minister Yoshihiko Noda, left, said the government would spend at least $13 billion to clean up vast areas contaminated by radiation from the world’s worst nuclear disaster since Chernobyl.
Decontamination was “a prerequisite for people to return to their homelands.” About 80,000 people have been forced to leave their homes.
He said more money would come in next year’s budget.
TEPCO has lost the honorable face
The predictably inscrutable politics of Japan are the key to understanding this matter, rather than Western sensibilities such as P&L and balance sheets. A few predictably enigmatic, press statements appear to couch much meaning. The TEPCO problem is Japanese.
Tepco … “has lost the honorable face”
http://search.japantimes.co.jp/cgi-bin/eo20110516a1.html
SENTAKU MAGAZINE Monday, May 16, 2011
The new enervated Tepco
Tepco's corporate structural problem, which led to the Fukushima accidents, surfaced in the spring of 2002 when a whistle-blower revealed that Tepco managers had covered up troubles found at the Fukushima No. 1 nuclear power plant and falsified reports to the Ministry of Economy, Trade and Industry. Subsequently, similar irregularities were reported at the Fukushima No. 2 plant and the Kashiwazaki-Kariwa plant in Niigata Prefecture. These incidents created so much anger among municipalities and citizens that Tepco was forced to suspend the operation of all its nuclear plants. Katsumata and Shimizu are able executives in normal times but are not of the caliber to exercise crisis leadership.
As Tepco's top executives appear unable to judge which is more important — the frontline (Fukushima No. 1), the Tepco headquarters or the prime minister's headquarters, they are snuggling up to the government. The people in Tepco's top management today have forgotten to pay attention to electricity users and local residents living near power stations. Tepco, which has survived until now through collusion with the government, has lost the honorable face as the leader of the power industry. It is wandering about.