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TOKYO (Dow Jones)--The government of Prime Minister Naoto Kan on Friday signaled its intention to enact a rescue plan for embattled Tokyo Electric Power Co. within the current parliamentary session amid growing concern about the utility's funding situation.
"There is still time left for discussion in the current parliamentary session," Economy, Trade and Industry Minister Banri Kaieda said in a late news conference. "Let us have an in-depth discussion on this issue." The current parliamentary session is set to finish on June 22.
An early passage of the legislation is seen crucial to keep Tepco alive. The company is facing debt redemptions of Y750 billion by next March, as well as massive compensation claims from victims of a nuclear plant disaster at the Fukushima Daiichi complex.
The rescue plan is designed to shift the burden of compensation temporarily to other utilities and taxpayers, allowing Tepco to pay off all the liabilities over a period of time.
But some ruling party lawmakers are opposed to the proposal.
The rescue plan is expected to take several months to implement even after being approved by the parliament. Analysts at Moody's Investors Service have said that the failure to get the bill through the parliament within the current session could result in a serious funding problem at Tepco early next year.
To win public support for the taxpayers-funded rescue, Tepco on Friday unveiled a Y600 billion cost-cutting plan, while reporting a record amount of annual loss for any Japanese non-financial company, totalling Y1.247 trillion for the 12 months ended March, compared with a net profit of Y133.78 billion in the previous year.
"We would like to see Tepco doing as much cost-cutting as possible," Kaieda said, commenting on the restructuring plan. Tepco's president-elect, Toshio Nishizawa, said the company has already done all it can to reduce costs, including a suspension of executive remunerations and a sale of most of the non-essential assets.
Kaieda also said that he is looking for Nishizawa to stabilize the stricken plant "as early as possible."
-By Mitsuru Obe, Dow Jones Newswires, +81-3-6269-2770;
mitsuru.obe@dowjones.com