Shareholders in Tokyo Electric Power Co <9501.T> will also be asked to help support the utility as it copes with compensating victims of its crippled nuclear plant in northern Japan, the government's top spokesman said on Thursday.
It was the first time Chief Cabinet Secretary Yukio Edano singled out shareholders for cooperation in supporting Tokyo Electric, which is due to be saved from collapse by a government-backed fund unveiled last week to handle compensation.
Edano came under fire last week when he said the government scheme would unlikely gain public support unless Tokyo Electric's banks waived debts. Those comments triggered a sell-off of banks and dragged down the stock market.
Edano said on Thursday that as long as Tokyo Electric, commonly known as Tepco, was due to receive taxpayer support it should not be considered a normal private-sector company and called on the utility to do what it can to shore up its finances.
Tepco should seek cooperation from various stakeholders, not only lenders but also shareholders. It should make such efforts as if it were not in line to receive government support, Edano told a news conference.
Tepco should then report this to the government and then this should be disclosed to the public, he said, adding that if the utility could not win public backing for its efforts then the government could not support it.
The government last week agreed to set up a fund using taxpayers' money to help Tepco compensate victims of the crisis at Fukushima Daiichi, its nuclear plant that leaked radiation following the March 11 earthquake and tsunami.
Critics have said the scheme does not go far enough to hold shareholders and creditors accountable for the crisis.
Government officials that worked on the scheme were wary of taking steps that could disrupt financial markets. Tepco is Japan's largest corporate bond issuer and its shares are widely held by financial institutions.
Tepco shares, which have lost about 80 percent of their value since the March 11 disasters, extended earlier losses on Edano's comments and were down 6.4 percent at 0417 GMT.
Hideo Arimura, a senior fund manager at Mizuho Asset Management, said it was unclear what Edano's comment on Thursday might mean to shareholders.
No serious long-term players are involved in trading Tepco's shares anymore, so it's difficult what that would mean for these shareholders, Arimura said.
He said he may seek the shareholders' cooperation, which may also imply that the government won't let the Tepco's stock fall to zero, he said.
(Reporting by Yoko Kubota, Antoni Slodkowski; Editing by Edwina Gibbs and Nathan Layne)