Financial close for Osaka's $19bn airports concession

A consortium of 13 financial groups has arranged project finance loans totalling JPY190 billion(€1.53 billion; $1.7 billion) for the 44-year concession of Kansai International Airport and Osaka International Airport, the largest airport concession in Japan. 

Mizuho Bank acts as the facility agent for the overall administration of the financing while Sumitomo Mitsui Banking Corporation acts as the security agent. 

The Kansai Airports concessionaire was established by Japanese financial services group Orix Corporation and France's Vinci Airports last December, following the awarding of the contract last November. 

The concessionaire's funding plan totals JPY260 billion ($2.3 billion; €2.1 billion), JPY80 billion of which will be paid out of shareholders contributions. Upon completion of the deal, the pair will pay JPY2.2 trillion to the government, with additional cash to be disbursed if the business makes more than JPY150 billion in annual revenue, according to Vinci. 

At the end of this month, the consortium will take over the operations of two international hubs in Osaka and run them for 44 years. Orix and Vici each hold a 40 percent share in the consortium, with the remainder held by local companies. 

“The financing for the concession is the first project financing for the concession-based project in Japan, as well as the largest project financing to date in Japan,” SMBC said in a statement.   

Earlier last month, Japan decided to privatise Hokkaido's New Chitose Airport, possibly along with three others nearby, according to Nikkei Asian Review. 

Hitting a record passenger traffic of 20.45 million in 2015, the airport's earning power is second only to Tokyo's Haneda among Japan's 27 state-run airports. Its operating rights are valued at more than JPY100 billion.

Around 15 state-owned airports are already in the process of being privatised, including Sendai Airport and the two Osaka airports.