GGRAsia – Wakayama assembly frets IR funding ‘still unclear’

Wakayama assembly frets IR funding ‘still unclear’

Feb 08, 2022 Newsdesk Japan, Latest News, Top of the deck

A committee of Wakayama’s prefectural assembly tasked with examining that Japanese community’s tilt at having a casino resort, has issued a statement expressing concern that planning and fundraising for the project is “still unclear”.

“Unfortunately, the committee has to say that the plan is still unclear in details and is not convincing as to the fundraising,” said the announcement from the Integrated Resort Special Committee after its third meeting on Monday, and which lasted seven hours.

“The committee strongly demands the prefecture [government] show the certainty of the fundraising in the next, i.e. fourth, committee meeting,” added the statement, according to GGRAsia’s Japan correspondent.

But the committee nonetheless agreed to let the government for the prefecture (pictured) start gathering public comment on the integrated resort (IR) project idea, even though the committee sought more detail on the practicalities.

In December, an assembly member had urged that Wakayama not start the public consultation phase, until the financing was clear. A budget of JPY470 billion (US$4.07 billion) has been mentioned previously.

The reason for the committee’s acquiescence now on public comment gathering, is that the prefectural government emphasised the limited time available before the April 28 deadline for submitting such a scheme to the national government.

Wakayama prefectural assembly’s IR Special Committee has the job of examining the draft of the local District Development Plan concerning a gaming complex.

Clairvest Neem Ventures KK is leading the investment proposal regarding a casino in Wakayama, as the private-sector partner. The initiative is being coordinated by the prefectural government.

According to GGRAsia’s correspondent, some information on the project financing was submitted to committee members prior to Monday’s meeting.

The prefectural government and Clairvest Neem Ventures have previously mentioned existence of other forms of pledge, including letters of intent and confidence letters.

But that information was judged by the assembly’s committee as insufficient, as it sought evidence of commitment letters issued by equity investors and banks, to ensure they put money into the project when needed.

On February 4, the Yomiuri Shimbun news outlet had reported that JPY140 billion for the scheme would be provided via equity, from collectively: Clairvest Neem Ventures; Clairvest Group Inc, a Canada-based private equity firm; Caesars Entertainment Inc, a United States-based casino operator; and others including Japanese companies. The other Japanese companies however were not named in the documents, according to the report.

A statement in September, had said Caesars’ participation in Wakayama would be with “no capital commitment”.

According to the Yomiuri Shimbun, the scheme would involve JPY330 billion in bank borrowings, including from Credit Suisse and other banks. But the other institutions were not identified in the documents submitted to the committee, according to the report.

Under Japan’s casino-liberalisation arrangements, qualifying local governments must have a private-sector partner in order to develop a project. Up to three such facilities will be allowed in Japan, under the country’s liberalisation framework.