[credit provider=”TEPCO via Yomiuri” url=”http://www.yomiuri.co.jp/national/news/20110316-OYT1T00486.htm?from=top”]
A faction within Japan’s government wants to bankrupt the Tokyo Electric Power Company (TEPCO), break it apart, and take away its executives pay and give it to earthquake victims, according to Asahi.com (via Steve Herman).While the move is still just in the proposal stages, it does show the rising pressure on some potion’s of Japan’s government and bureaucracy to act against TEPCO.
There is opposition to this move, but according to the report, it could have a devastating impact on lenders to the company.
Finally, the law would put a moratorium on the repayment of debt, including corporate bonds, from before the March 11 earthquake and tsunami.
Instead, supporters of the restructuring plan want to keep TEPCO in its current form in the short term and use government guarantees to keep it running.
Those guarantees would not extend to financial claims dating from before the finalization of the government bailout plan, including approximately 2 trillion yen ($23.6 billion) in emergency loans recently extended by major financial institutions.
TEPCO CDS had been off the charts at times before this came to be public knowledge, but are likely to be under renewed pressure if bondholders believe they will be further forced to bare the burden of the Fukushima disaster.