Reuters: Mergers News: UPDATE 1-Tepco deal may give govt majority voting rights-Nikkei

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UPDATE 1-Tepco deal may give govt majority voting rights-Nikkei Apr 4th 2012, 18:48 April 4 | Wed Apr 4, 2012 2:48pm EDT April 4 (Reuters) - Japan's government plans to take a majority stake in Tokyo Electric Power Co (Tepco), with a 1 trillion yen ($12.16 billion) capital injection, in a deal that may see it gain more than two-thirds of the company's voting rights, the Nikkei reported. The operator of the tsunami-hit Fukushima nuclear plant, which has been trying to limit the government's stake to a third, said it will consider accepting the terms of the deal, if the company's next chairman agrees, the Japanese business daily said. The ownership terms are nearly set, awaiting the approval of the new chairman, who is yet to be selected, the newspaper said. The proposed bailout will be administered by the government-backed Nuclear Damage Liability Facilitation Fund, which would raise the money from private-sector banks with government guarantees, the Nikkei said. Under the terms now being discussed, the government fund would obtain 50.1 percent of voting rights as early as July, the daily reported. If the company fails to meet targets for cost cutting and other parts of its forthcoming restructuring plan, the non-voting shares would take on voting rights and the fund's stake would likely top out at 75 percent, the Nikkei said. At that level, the fund's interest would be high enough to push through mergers or other major reorganizations. In February, Japan's trade minister threatened to block a plan to rescue Tokyo Electric Power Co with an injection of public funds unless the government got more say in the running of Tepco. Tepco's Fukushima plant was wrecked by the quake and tsunami last March, triggering the world's worst nuclear crisis in 25 years and swamping the firm with huge clean-up, compensation and decommissioning costs, as well as a big fossil fuel bill. Link this Share this Digg this Email Reprints

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