Leading life insurers are expected to jointly loan hundreds of billions of yen to embattled Tokyo Electric Power Co. to help it tackle the nuclear accident and buy fuel for its thermal plants, sources said.
Leading life insurers are expected to jointly loan hundreds of billions of yen to embattled Tokyo Electric Power Co. to help it tackle the nuclear accident and buy fuel for its thermal plants, sources said.
It will be the first time for the utility to officially ask Dai-ichi Life Insurance Co. and Nippon Life Insurance Co. for loans, expected next week or later, in the wake of the March 11 Great East Japan Earthquake, according to the sources.
TEPCO is struggling to resolve the crisis at the Fukushima No. 1 nuclear plant. The two insurers are among TEPCO's largest shareholders.
The insurance companies are expected to grant TEPCO's request as they now believe the utility will likely avert a collapse. A bill in which the government will assist the utility's compensation payments has been submitted to the Diet.
The two insurers together extended loans totaling 300 billion yen ($3.73 billion) to the utility as of late March 2010.
TEPCO senior officials are to visit the insurance companies and leading banks, including Sumitomo Mitsui Banking Corp., starting from next week to request loans.
The loans are expected to finance efforts to bring the crippled reactors under control and buy fuel for thermal power plants that have been restarted to boost power supplies.
Mega banks assisted TEPCO operations with a combined 2 trillion yen in emergency loans in late March.
The banks will likely help the utility by refinancing the loans, rather than extending new ones.
TEPCO must find a vast amount of funds, as little progress has been made in bringing the seriously troubled reactors under control.
It will turn to the insurance companies because the utility can no longer find buyers for its usual corporate bonds since the disaster.
The administration of Prime Minister Naoto Kan submitted a Diet bill on June 14 to help the utility's compensation for people affected by the nuclear accident.
TEPCO, desperate for cash, is expected to assure the banks that the need to lower or remove interest payments or waive the loans will not arise.