MGM Resorts Osaka Partner in Japan Sets Aside $2.4B for Casino Project Start
Posted on: November 9, 2021, 05:24h.
Last updated on: November 8, 2021, 05:25h.
An integrated resort (IR) consortium led by MGM Resorts and Orix Corporation is the preferred casino developer in Japan’s Osaka Prefecture.
The combined group has proposed an IR development with a total investment budget in the neighborhood of $10 billion.
Orix, a financial services conglomerate founded in Osaka but today headquartered in Tokyo, revealed recently that it has set aside JPY270 billion (US$2.4 billion) in cash to help achieve its IR goals. The approximately $2.4 billion allocation is for its initial investment in the undertaking.
MGM and Orix plan to be equal partners under a 40-40-20 arrangement. MGM and Orix will control 40 percent each, with the remaining 20 percent stake owned by an assortment of companies interested in investing in the scheme.
MGM Resorts and Orix Corporation, with approval from Osaka Prefecture and local city officials, hope to build their IR on Yumeshima. The man-made artificial island measures 960 acres, and is set to host the Expo 2025 World’s Fair April through October of that year.
Orix Executive Officer Hitomaro Yano told investors recently that the location for the casino presents challenges.
Because it is a landfill site, the construction plan will be finalized after a ground survey, including work such as boring. Orix has some criteria that must be satisfied in the upcoming processes, but we will continue to proceed with the project’s implementation,” Yano explained.
MGM and Orix are working directly with Osaka government officials in designing and planning the project’s complete blueprint. Once that is finished, Osaka will bid Japan’s central government for one of its three forthcoming IR concessions.
Osaka must present its IR submission to the central government’s Ministry of Land, Infrastructure, Transport, and Tourism by April 28, 2022. The only other prefectures currently prepping IR bids are Nagasaki and Wakayama.
Way Too Early Opening Time Line
MGM Resorts CEO Bill Hornbuckle discussed the company’s Japan goals during an investor call in August. The chief executive revealed that MGM and Orix have their eyes set on 2029 to open the IR.
As for financing, Bloomberg reported recently on a slew of companies that are expected to join the 20 percent segment of the overall ownership structure. They include France’s VINCI Airports, which fully manages the operations of Kansai International Airport — Osaka’s main air hub.
Additional investors are Kansai Electric Power, Kintetsu Group Holdings, and global consumer electronics giant Panasonic. Kansai Electric is an electric utility, while Kintetsu is a railway conglomerate that owns more than 140 subsidiaries that are invested in a variety of industries. Kansai, Kintetsu, and Panasonic all call Osaka home.
Hornbuckle says that MGM and Orix are expecting to each invest roughly $4 billion. But if the 20 percent component doesn’t come through, the MGM boss says the two consortium leaders will step up and complete the financing with an additional $2 billion.
Published at Tue, 09 Nov 2021 13:24:18 +0000