The Japanese government has agreed to inject 1 trillion yen ($12.5 billion) into Tokyo Electric Power Company, operator of the stricken Fukushima Daiichi nuclear power station.
Japan’s trade and industry minister, Yukio Edano, said the capital injection was needed to ensure the utility company could continue to supply electricity to 45 million people, including residents of Tokyo, UK newspaper The Guardian reported.
“Without the state funds, [Tepco] cannot provide a stable supply of electricity and pay for compensation and decommissioning costs,” Edano said after approving what amounts to a state takeover of the firm, according to the report.
Under a ten-year restructuring plan the government will acquire more than half of Tepco’s shares and it will have the option to increase its stake to more than two-thirds if the company fails to reach restructuring targets. Tepco plans to reduce costs by 3.7 trillion yen over the next ten years and cut a 10th of its workforce, The Guardian reported.
Meanwhile, leadership changes as a result of the plan will see the current Tepco chairman, Tsunehisa Katsumata, replaced by Kazuhiko Shimokobe, a lawyer selected by the bailout fund. Naomi Hirose, a Tepco director currently overseeing the firm’s response to the accident, has been appointed company president and will take over in June following formal approval from shareholders.
