Tokyo Electric Investors May Be Wiped Out After Nuclear Crisis

[Fledermaus]

March 31 (Bloomberg) -- Tokyo Electric Power Co.’s shareholders may be wiped out by clean-up costs and liabilities stemming from the worst nuclear accident since Chernobyl.

The company faces claims of as much as 11 trillion yen ($132 billion) if the crisis lasts two years that could lead to nationalization, according to Bank of America Merrill Lynch. Investors including Mitsushige Akino and Edwin Merner also said shareholders should brace for further losses.

Tokyo Electric has tumbled 78 percent, the worst performer on the MSCI World Index, since the March 11 earthquake and tsunami knocked out cooling systems at the Fukushima Dai-Ichi nuclear plant, causing radiation to leak. Should the crisis persist, the company may be unable to repay bondholders and could be taken over by the government, according to Merrill.

“Some sort of capital reduction or dilution is inevitable depending on the degree of shareholder responsibility,” said Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co., not including Tokyo Electric’s stock. “It’s not yet clear whether it will be down to zero or just halved, but it won’t be what it is now.”

http://www.businessweek.com/news/2011-03-30/tokyo-electric-investors-may-be-wiped-out-after-nuclear-crisis.html

[Poll_Blind]

1. EXCELLENT way to teach investors to put their money in renewable resources.

PB

[Tansy_Gold]

3. +1 n/t

[DJ13]

2. See

They should have invested in US banks.......

[Nihil]

5. Or real estate on the NE coast ...

[snappyturtle]

4. Good. nt

[exboyfil]

6. If it works like the U.S. then the Japanese

politicians are working overtime to ensure that the big shareholders don't take a massive haircut. Watch for B.S. liability limits come up before long.

[FBaggins]

7. That doesn't seem to fit the U.S. model

Politicians worked overtime to save companies (in name only in some cases) and jobs... but the shareholders were wiped out.

How much did GM shareholders keep? Wachovia?