Orix unveils partnership agreement with MGM for Osaka IR development

Hitomaro Yano, executive officer at Orix, has revealed that Orix and MGM will each hold 40 per cent equity in the proposed IR.

Japan.- In September, Osaka Prefecture selected MGM-Orix as its partner for its IR bid. Now, Hitomaro Yano, executive officer at Orix, has revealed details of a partnership agreement between the company and MGM Resorts. The companies will each hold 40 per cent equity in the scheme while a group of other companies will hold 20 per cent.

Around 20 firms from the surrounding Kansai region have agreed to take an equity stake in the consortium that will develop the planned resort. Orix has slated a total investment of JPY1tn (US$9.1bn) in the IR.

Speaking to Bloomberg, Yano said Orix’s initial investment would be nearly JPY200bn (US$1.76bn). He said half the total cost of the integrated resort would be funded by non-recourse loans.

Osaka Prefecture is expected to submit its IR development plan to the national government in April 2022. In July, MGM-Orix confirmed that the resort would not launch until at least 2028, and possibly not until 2030.

MGM-Orix could benefit from Japan election results

Analysts believe the results of Japan’s general elections last weekend could be positive news for the country’s integrated resort plans, especially for Osaka Prefecture and its partner, the MGM-Orix consortium.

The elections gave a victory to Fumio Kishida, Japan’s prime minister as of October 4, and his Liberal Democratic Party, but Osaka’s right-wing Ishin To party made big gains, going from 11 to 41 seats to become the third-largest party in the country. In Osaka, the party completely expelled the Liberal Democratic Party.

Industry executive Daniel Cheng stated: “If Osaka was already the firm favourite prior to the election, it is even more certain now that they will bring the licence bacon home and Bill Hornbuckle can start heating up the grill in his backyard and invite his ORIX partners for an early celebration barbecue.”

In the capital, the ruling party has lost some advantage to opposition but it would be unlikely to upset a possible IR bid from Governor Koike.