MGM to invest over $ 9.09 billion in Osaka IR project with local partner Orix
The only remaining bidder is expected to submit their full proposal to the Japanese city on Tuesday
GM Resorts and Japanese financial services group Orix alliance, the only one to have indicated its intention to build and operate the Integrated Resort (IR) facility proposed by Osaka Prefecture, plans an investment of 9.09 billion US dollars (1,000 billion yen) and is expected to submit its full proposal to the city and prefecture of Osaka on Tuesday, according to a report from Sankei.
The planned complex will include a casino, hotels, restaurants, a conference center and other entertainment facilities, and will be operated by both companies, while MGM will manage the casino.
Osaka Integrated Complex Fundamentals Plan included a total floor space of up to one million square meters, with a proposal for Japan’s largest international conference center.
MGM and Osaka will also be commit to spending an additional US $ 182 million for infrastructure development costs, as part of a project to extend the Osaka metro to the Yumeshima IR site. These combined costs would see the the total expenses of MGM and Orix approach US $ 10 billion.
MGM and Orix are expected to be equal partners in this financial venture, and so far they have been the only operators to respond to recruiting from the Osaka RI Promotion Office. This means that they are the only group participating in the competition for the license.
According to a statement made in a weekly note to customers by Vitaly Umanski, senior research analyst at brokerage firm Stanford C. Bernstein, “MGM would not be a controlling part of the development. This is the first clear sign that casino operators may have less than 50% or a majority stake ”.
Osaka officials will review the proposal before making a decision on whether to approve MGM and Orix as an official operating partner. The next step for the scholarship, if accepted, will be to submit an application to the central government by April 2022.
Based on the business plan of the Orix-MGM Union, the prefecture is expected to be certified as an IR maintenance company around September this year. After that, the prefecture and the coalition will set up a final maintenance plan and apply to the national government for certification around April of next year.
The national government intends to approve IR maintenance at up to three sites in Japan: Yokohama, Nagasaki and Wakayama. A massive investment plan of US $ 9.1 billion should be a positive wind for the government to approve the prefecture’s affairs.