Jun 14, 2011

Sumitomo Mitsui Says It Won’t Sell Tepco Stake or Forgive Loans

Posted by coolcoolbird at Tuesday, June 14, 2011
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( Article taken from http://www.bloomberg.com/news/2011-06-13/sumitomo-mitsui-says-it-won-t-sell-tepco-stake-or-forgive-loans.html)


Sumitomo Mitsui Financial Group Inc. (8316), one of Tokyo Electric Power Co.’s biggest shareholders and lenders, said it has no plans to sell its 2.2 percent stake in the nuclear plant operator or forgive its loans or interest.
“We are not going to sell Tepco shares until things around it stabilize,” Takeshi Kunibe, chief executive officer of Sumitomo Mitsui Banking Corp., the banking unit of Japan’s second-biggest lender by market value, said in an interview on May 27. “We won’t go ahead with a selloff which could add downward pressure on Tepco’s share price.”
Sumitomo Mitsui’s securities holdings lost 92 billion yen ($1.1 billion) in the quarter ended March, mostly from an 83.5 billion yen decline in the value of its stake in Tokyo Electric, Kunibe said. The utility’s stock has plunged 91 percent, erasing 3.1 trillion yen in market value, since a March 11 earthquake and tsunami triggered the worst nuclear crisis in 25 years.
Chief Cabinet Secretary Yukio Edano last month suggested lenders waive loans made to Tepco, as the company is known, before the disaster. Standard & Poor’s cut the utility’s credit ratings to junk status on May 30, citing an increasing likelihood that banks may restructure some of its debts.
“We leave forgiveness of Tepco’s loans or interest out of consideration, as the government’s May 13 compensation scheme doesn’t envisage such waivers,” Kunibe, 57, said in the interview.

Kan’s Tepco Plan

Under the plan crafted by Prime Minister Naoto Kan’s government, a third-party organization will be formed to pay compensation to victims of the nuclear accident. The government may give public funds to the entity, while Tepco should call on its stakeholders, particularly financial institutions, for cooperation.
After the quake, a group of Japanese lenders including Sumitomo Mitsui and rivals Mitsubishi UFJ Financial Group Inc. (8306) and Mizuho Financial Group Inc. (8411) provided about 2 trillion yen in loans to Tepco. The rival banks also hold shares of the utility.
Noting that Tepco supplies power to an area covering 40 percent of Japan’s gross domestic product, Kunibe said the loans “were aimed at supporting the important energy provider and Japan’s economy.”

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Damn! I'm looking for excuse! When going to lose my money in speculation!
Lesson learned!

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