Tepco Sells KDDI Stake to Help Compensate Fukushima Victims
Tokyo Electric Power Co. announced on Monday it has reached an agreement to sell its stake in KDDI Corp for 186.3 billion yen (about $2.4 billion) to help the company cover its mounting compensation costs for victims of the March 11th disaster at its Fukushima Daichi nuclear facility. The company, commonly referred to as Tepco, said it will book a loss of 35.1 billion yen on the sale, in which it will sell its 8 percent stake back to KDDI, a Japanese telecommunications firm.
The KDDI sale is the largest so far in a series of sales of Tepco assets aimed at raising capital to compensate victims of the worst nuclear tragedy since Chernobyl some 25 years ago. Tepco's Fukushima Daichi nuclear power plant in northeastern Japan was crippled by the devastating earthquake and tsunami that struck the area on March 11th. A government panel has estimated the cost of the disaster may top 4.5 trillion yen over the next two years, meaning Tepco will have to sell off numerous more major assets to deal with the costs.
In addition to Tepco's costs for compensating victims, the company is also dealing with fuel costs that have nearly tripled since the disaster because the company has had to increase its thermal power generation to replace the power generated by the Fukushima reactors, of which 15 of 17 are still inoperable. The government panel assigned the task of reviewing Tepco's books and setting up compensation requirements has given the company three years to raise 707.4 billion yen through asset sales to compensate victims.
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