TOKYO Nov 29 The operator of the crippled
Fukushima nuclear plant is forecasting profits that fall short
of minimum levels set by its banks, but the lenders are likely
to ease their lending conditions to allow fresh financing for
the embattled utility, people involved in the process said on
As part of a financial revival plan to be completed next
month, Tokyo Electric Power Co (Tepco) will forecast
recurring profit of 167.7 billion yen ($1.64 billion) for the
business year starting next April, the sources told Reuters on
condition of anonymity.
This falls far below the original forecast for the period,
made under the current business plan, of a 261.9 billion yen
profit and below the minimum 200 billion yen requirement under
the lending covenants set by Tepco's creditors, including
Sumitomo Mitsui Financial Group and Mizuho Financial
Group, the sources said.
When a borrower breaches a covenant, the lender can request
repayment of the loan. But the sources said Tepco's main banks
are likely to go along in December with the company's request
for 500 billion yen in financing: 300 billion yen in new loans
and 200 billion yen in loan rollovers.
That is because the banks largely agree with Tepco that the
big cut in its profit forecast is mainly the result of a delay
in the restart of Tepco's undamaged Kashiwazaki Kariwa nuclear
plant on the Japan Sea coast.
Tepco had previously forecast that plant, the world's
largest nuclear facility, would come back on line from April of
this year. It now expects it to restart in July 2014.
All of Japan's nuclear reactors have been shut down for
safety reasons in the wake of the March 2011 earthquake and
tsunami that wrecked Fukushima.
Representatives for Tepco, Mizuho and Sumitomo Mitsui
declined to comment.
($1 = 102.2150 Japanese yen)
(Additional reporting by Kentaro Hamada; Writing by William
Mallard; Editing by Edmund Klamann)