Major Banks Arrange Loan for Kansai Electric Power Co.
On Thursday, sources familiar with the matter said in light of the utility’s difficulties in borrowing with bond issues, possibly later this month Mizuho Corporate Bank and other major banks are arranging to provide a syndicated loan of up to 50 billion yen to Kansai Electric Power Co. the sources said Kansai Electric has requested the banks provide loans to capital outlays for facilities and equipment and finance the costs of fuel for its thermal power generation plants.
The utility based in Osaka relinquished a plan to float 20-30 billion yen in corporate bonds in June after it became impossible to issue them at low interest yields at which the company had planned to issue them. It happened in the aftermath of the crisis at the Fukushima Daiichi nuclear plant of Tokyo Electric Power Co. the business environment surrounding electric utilities with nuclear power plants will become harsh by The nuclear crisis.
As they have to generate more power from thermal or other power plants, the utilities are expected to incur greater fuel costs. If they find it impossible to float bonds at low interest yields, there is the possibility that the utilities will have to rely on banks for more loans. At the end of March, Major Banks provided Tokyo Electric Power with a combined 2 trillion yen in loans.