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Tepco may face $23.6bn in claims, JP Morgan says | |
(about 6 hours later) | |
Tokyo Electric Power Company (Tepco) may face as much as 2 trillion yen ($23.6bn; £14.5bn) in compensation claims, according to JP Morgan. | Tokyo Electric Power Company (Tepco) may face as much as 2 trillion yen ($23.6bn; £14.5bn) in compensation claims, according to JP Morgan. |
The company has been grappling to contain the radiation leak crisis at its Fukushima Daiichi nuclear plant. | The company has been grappling to contain the radiation leak crisis at its Fukushima Daiichi nuclear plant. |
On Tuesday, Japan's Nuclear and Industrial Safety Agency raised the severity of the nuclear crisis at the plant to level 7. | On Tuesday, Japan's Nuclear and Industrial Safety Agency raised the severity of the nuclear crisis at the plant to level 7. |
Japan has evacuated people living within a 20km radius of the plant. | Japan has evacuated people living within a 20km radius of the plant. |
The power station was one of the worst hit by the earthquake and tsunami which engulfed much of Japan on 11 March. | The power station was one of the worst hit by the earthquake and tsunami which engulfed much of Japan on 11 March. |
As the company struggles to contain the nuclear crisis, its shares have taken a beating on the Tokyo stock exchange. | As the company struggles to contain the nuclear crisis, its shares have taken a beating on the Tokyo stock exchange. |
Tepco shares have lost more than 75% of their value since 11 March, in the process hitting all-time lows. | Tepco shares have lost more than 75% of their value since 11 March, in the process hitting all-time lows. |
Investors have been worried about the impact of the current crisis on the company's profit. | |
Natural disaster | |
While there have been concerns about the huge compensation bill that Tepco may have to face, analysts say a lot will depend on how a law governing these cases is interpreted. | |
Under Japanese law, operators of a nuclear facility can be waived of any liability if the accident is deemed to have been triggered by a natural disaster of an exceptional character. | |
Whether the current crisis fits that classification will determine the course for Tepco, analysts say. | |
"A key issue concerning damage compensation is whether the Fukushima nuclear plant accident is considered an unavoidable natural disaster," said Tomohiro Jikihara of JP Morgan. | |
The Japanese government is yet to decide whether it will classify the earthquake and tsunami as an exceptional disaster. |
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