GGRAsia – Osaka IR clinches US$3.42bln loan with group of banks

Osaka IR clinches US$3.42bln loan with group of banks

Apr 24, 2024 Newsdesk Japan, Latest News, Top of the deck

Osaka IR KK, the entity that is to develop an integrated resort (IR) with casino in the Japanese metropolis of Osaka, clinched on Tuesday a JPY530-billion (US$3.42-billion) loan agreement with a group of banks, including Japanese lenders Mitsubishi UFJ Financial Group Inc, and Sumitomo Mitsui Banking Corp.

The amount was reported by news outlet Nikkei. It said the arrangement was thought to be the largest co-financing arrangement in Japan to be agreed with a group of banks. The names of the lead banks had been mentioned on April 19 by Osaka prefecture.

Nikkei confirmed that when an equity component from investors was added, the total funding plan for MGM Osaka came to JPY1.27 trillion.

The resort, due to open in 2030, will be at Yumeshima (pictured in a file photo) an artificial island in Osaka Bay.

Osaka IR KK has MGM Resorts Japan LLC – a unit of United States-based casino group MGM Resorts International – and Japan’s Orix Corp, as the main shareholders.

On Monday it had been reported that Japanese conglomerate Hankyu Hanshin Holdings Inc and another domestic conglomerate, Hanwa Co Ltd, had decided to join a group of minority domestic investors in the Osaka IR scheme, taking the total of minority stakeholders to 22.

According to the newcomers’ respective websites, they have their corporate headquarters in Osaka.

Sankei Shimbun reported on Monday that prior to Hankyu Hanshin joining the project, it had been the only Kansai-region group with railway business interests not to be on board.

On April 19, Osaka prefecture gave an update on the structure of the IR project funding, and the stake percentages of the parties.

It said the equity funding would be JPY740 billion, and the loan portion JPY530 billion, with the percentage interests in the project being MGM Japan at 41 percent, Orix also at 41 percent, and minority investors on circa 17 percent.

Previously the equity funding was to have been JPY720 billion, and the loan portion JPY550 billion. Previously the stake percentages were to have been MGM Japan on 43 percent, Orix on 43 percent, and minority investors on circa 15 percent.

Yumeshima will host, ahead of the MGM Osaka IR’s opening, an event called Expo 2025 Osaka, Kansai, Japan.

On April 17, MGM Resorts announced that it would be participating as a sponsor in the U.S. pavilion at the Expo, which is due to run from April to October 2025.