Second Japan nuclear operator seeks government bailout

By Taiga Uranaka TOKYO (Reuters) - Japan's Hokkaido Electric Power Co <9509.T>, facing a third year of financial losses, is seeking a capital infusion from a state-owned lender, a source with knowledge of the matter said on Tuesday. If successful, Hokkaido Electric would be the second nuclear operator to receive a government bailout since the Fukushima crisis in 2011. Japanese media earlier reported that the utility will get the bailout. The regional utility is one of several Japanese nuclear operators in dire financial straits amid a prolonged shutdown of Japan's nuclear power stations, for safety checks, that requires them to import more costly thermal fuels. Hokkaido Electric is asking the government-owned Development Bank of Japan to buy 50 billion yen worth of preferred shares in the company, said the source, who was not authorised to discuss the matter publicly. Hokkaido Electric, which is the regional monopoly that supplies power to the country's northernmost island of the same name, is considering multiple options, including the bailout, a company spokesman said. The company's shares fell 8.6 percent by the morning close on the Tokyo Stock Exchange. Tokyo Electric Power Co (Tepco) <9501.T> was bailed out by the government in 2012, after an earthquake and tsunami hit its Fukushima Daiichi nuclear plant north of Tokyo the previous year, causing the worst atomic crisis since Chernobyl in 1986. All of Japan's 48 nuclear reactors are in shutdown and undergoing stringent safety checks with no schedule for restarts, forcing operators to import more costly fossil fuels. The prolonged shutdown of Hokkaido Electric's sole Tomari nuclear plant and the cost of burning more fossil fuels has put it on course for a third straight financial year of net losses. According to Japanese banking practices, it is very difficult for lenders to extend credit, including refinancing existing loans, to organizations that post three consecutive years of financial losses. Hokkaido Electric is expected to negotiate the proposal with other shareholders and announce the plan by the end of April, with an official decision to be made at its annual shareholders meeting in June, said the Nikkei. (Additional reporting by James Topham, Osamu Tsukimori, Kentaro Hamada; Editing by Aaron Sheldrick and Michael Perry)