OSAKA: Japanese banks and trust groups will provide around 2 trillion yen ($24.6 billion) to troubled Tokyo Electric Power this month to help cover costs for repairing its power plants, reports said.
Three major banking groups Sumitomo Mitsui Financial, Mizuho Financial and Mitsubishi UFJ Financial as well as Sumitomo Trust & Banking and Chuo Mitsui Trust and Banking decided Wednesday to offer financing, Jiji Press said.
Sumitomo Mitsui Banking will provide about 600 billion yen and Mizuho Financial roughly 500 billion yen, with the three others each providing several hundred billion yen, Jiji said.
TEPCO needs cash to boost electricity supply and carry out repairs at plants hit by the biggest earthquake ever recorded in Japan, which triggered a crisis at the firm's Fukushima Daiichi nuclear plant that has yet to be resolved.
The utility had traditionally procured funds mostly through issuing corporate bonds, but this time it has opted for bank loans after its credit rating was downgraded by both Moody's and Standard & Poor's.
TEPCO's financial health is expected to take a major hit due to the nuclear power plant crisis following the March 11 earthquake and tsunami that ravaged Japan's northeastern coast.
The firm has lost around 1.93 trillion yen ($24 billion) in market value since the disaster after its shares were hammered, although it has clawed some of that back.
On Wednesday TEPCO's shares were down 1.1 percent at 1,086 yen after rising to as high as 1,175 (up 7.0 percent) with investors undecided on how to react to the news that the embattled company was set to receive the emergency loans.
"The company is a complete wild card, and its shares are not showing rational movement," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
He noted that TEPCO would likely halt future dividend payouts, which would diminish attraction for long-term investors.
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