TOKYO, Sept 29 (Reuters) - Tokyo Electric Power Company (TEPCO) said it will raise up to $6.6 billion in the largest share offering by a non-financial firm this year to fund the construction of low-carbon energy units and invest overseas.
TEPCO had announced plans earlier this month to bolster its renewable and nuclear energy operations and to expand its business in Asia, as it faces rising pressure to cut greenhouse gas emissions and shrinking demand at home.
It earmarked 2.5 trillion yen ($29.83 billion) for investment in low-carbon projects such as nuclear power plants, liquid natural gas units and the development of a smart power grid, as well as up to 1 trillion yen in growth areas, mostly overseas.
The company said on Wednesday it will issue up to 254 million new shares to raise up 555 billion yen, following earlier media reports that it was looking to raise several hundred billion yen. The announcement came after the close of trade.
The reports of TEPCO's first new share issue in 29 years had sent its stock tumbling 7.8 percent to 2,105 yen, the biggest one day drop in nearly 2 years. Volume spiked to 32 million shares, more than 10 times the daily average over the past 3 months.
'From a returns-based approach, or a capital-based approach, it is very difficult to make an arguement for the timing or rational for this,' said Penn Bowers, an analyst at CLSA Asia-Pacific Markets in Tokyo, commenting before the official announcement of the share sale.
'I'm surprised they feel the need to procure particularly this amount early on, most of their nuclear build is the second half of the decade in terms of requirements and some of those may eventually be delayed,' Bowers said.
(Additional reporting by Nobuhiro Kuko, Junko Fujita, Taiga Uranaka; Editing by Nathan Layne)
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