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TEPCO to post huge loss, president to resign

20 may 2011, 13:19
Tokyo Electric Power is expected to post an annual net loss of up to $18 billion due to the crisis at its crippled nuclear plant and announce the resignation of its president, reports said Friday, AFP reports.

TEPCO, the operator of the Fukushima Daiichi nuclear power plant, is also expected to unveil streamlining plans to eke out funds to compensate tens of thousands of people affected by the crisis.

Company president Masataka Shimizu, 66, will resign to take responsibility in the wake of the Fukushima accident, the mass-circulation Yomiuri daily said.

He will be replaced by a senior executive, Katsutoshi Chikudate, it added, without citing sources.

Chikudate, 69, from Fukushima prefecture, became standing auditor of the company in 2007 after serving as vice president.

The Yomiuri said TEPCO's net loss was believed to have reached about 1.5 trillion yen ($18 billion) for the past business year.

The Nikkei business daily and Jiji Press news agency reported the loss would be more than one trillion yen ($12 billion).

The loss would be the biggest-ever for a non-financial Japanese company, according to the Nikkei.

TEPCO shares slipped 0.83 percent to 355 yen by noon Friday. The shares have lost more than 80 percent of their pre-quake value.

The Fukushima plant, sitting on the northeastern coast facing the Pacific, was crippled by the March 11 earthquake and tsunami and has spewed radiation in the world's worst nuclear crisis since Chernobyl 25 years ago.

The Nikkei said TEPCO's losses include the cost of decommissioning four reactors at Fukushima and repairing thermal power plants that will go into operation to make up for an electricity supply shortage.

The company will also write down roughly 480 billion yen in deferred tax assets -- tax money paid in advance that can reduce a subsequent year's income tax -- as it no longer expects to stay in the black in the future, it said.

The Asahi Shimbun said the utility has borrowed a total of four trillion yen with the minimum rate of 0.5 percent per annum, sharply lower than 10 percent charged on another embattled company Japan Airlines in 2009, the daily said.

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