Japan's Kyushu Electric to raise $1.5 bln to fund green transition (updated)

Chugoku Electric Power Co

28/04/2023 11:01

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      Japanese utilities hit by high fuel costs
    

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      Government reluctant to approve power price rises  
    

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      Eight utilities post combined $4.7 bln FY loss
    

  
 (Adds details, background)
    By Katya Golubkova and Yuka Obayashi
       TOKYO, April 28 (Reuters) - Japan's Kyushu Electric
Power Co  9508.T  will issue 200 billion yen ($1.5 billion) in
preferred shares to help fund its green transition at a time
when high fuel prices are weighing on the sector's
profitability, the company said on Friday. 
    Japanese utilities were hit by high fuel costs last year as
a post-pandemic energy crisis was exacerbated by Russia's
invasion of Ukraine. 
    The government has also delayed raising electricity prices
as it tries to rein in inflation, at time when companies are
feeling pressure to work towards meeting a national carbon
neutrality goal set for 2050. 
    Kyushu Electric's preferred shares will "secure early
funding for carbon neutral initiatives and expansion of growth
businesses while strengthening our financial base," Tatsuo
Kumadaki, deputy general manager of its Tokyo branch, told a
news conference. 
    Kyushu Electric said the Class B shares are to be bought by
Mizuho bank, Development Bank of Japan and MUFG bank. The power
firm will buy and cancel Class A preferred shares worth 100
billion yen held by the same investors.
    On Friday, it forecast net profit of 90 billion yen in the
fiscal year ending March 31, 2024, after posting a 56.4 billion
loss in 2022/23.
    In all, eight Japanese utilities have this week posted a
combined full-year loss of 643 billion yen ($4.7 billion). 
    They are Tohoku Electric Power Co  9506.T , Chugoku Electric
Power Co  9504.T , Kyushu Electric, Okinawa Electric Power Co
 9511.T , Tokyo Electric Power Holdings  9501.T , Hokuriku
Electric Power Co  9505.T , Hokkaido Electric Power Co Inc
 9509.T  and Shikoku Electric Power Co Inc  9507.T .
    Many have had to dispense with tapping nuclear power
following the 2011 Fukushima disaster, though Japan is now
reviewing its use of that fuel in view of the global energy
crisis.
    Having nuclear power among its energy sources helped Kansai
Electric Power Co  9503.T  - which feeds Japan's major
industrial area of Osaka - to remain in net profit of 17.7
billion yen but that was still 79% lower year-on-year.
        One-off gains helped Chubu Electric Power Co  9502.T  to
post a 
    net profit of 38.2 billion yen
    .  
  
        ($1 = 135.6400 yen)

 (Reporting by Yuka Obayashi and Katya Golubkova; editing by
John Stonestreet)
 ((ekaterina.golubkova@thomsonreuters.com;))