Orix, Vinci win $18 bln rights to run Japan’s Kansai Int’l Airport

TOKYO, Nov 10 (Reuters) – Orix Corp and partner Vinci SA have won the right to run Japan’s Kansai International Airport for the next 44 years – a deal worth $18 billion and a milestone in the government’s efforts to involve private firms in major infrastructure projects.

The auction for the rights to run Japan’s fifth-busiest airport was meant to start a wave of public-private partnerships to attract investment to Japan, chip away at the government’s massive debt and introduce more market rigour to infrastructure management.

But it has not been successful as first hoped with the consortium led by Orix, a Japanese financial services company, and Vinci, a French construction and engineering firm, the only bidder as others were turned off by the airport’s 1 trillion yen ($8 billion) in debt.

Orix and Vinci said they will form a company to run Kansai International airport as well as the smaller Osaka International Airport and will pay the government 2.2 trillion yen over 44 years. Additional cash will be paid if the company makes more than 150 billion yen in annual revenue.

Kansai International Airport and other businesses that will be taken over made a combined 149.7 billion yen in the last business year.

The group said it is hoping to make the airport a hub for low-cost carriers and is planning a fourth terminal in addition to the third that is currently being built.

Orix and Vinci will each inject 32 billion yen for 40 percent stakes in the company while the rest will be held in by more than 20 minority shareholders that include Suntory Holdings and Panasonic Corp.

Mizuho Financial Group, Sumitomo Mitsui Financial Group and the state-owned Development Bank of Japan will extend a combined 160 billion yen in loans to the company.

Orix and Vinci will start operating the airport from April next year.

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