Akihabara News (Tokyo) — The Wakayama Prefectural Assembly has put its foot down, demanding that the Clairvest Neem Ventures-led consortium reveal how it would fund the construction of its proposed US$4.3 billion Integrated Resort (IR) including a casino before allowing the approval process to continue.
Wakayama Prefecture had previously announced that it would conduct a total of fourteen public hearings from November 25 to December 5, but this plan is now on ice until Clairvest can put some evidence on the table of its financial capability.
Last week, the Clairvest Group revealed in its latest financial disclosure in Canada that the entire book value (the value of their total assets minus the value of their total liabilities) of the firm had reached about US$711 million. Clearly, Clairvest itself can only front a small fraction of the development funds with its own money.
Caesars Entertainment, an undoubted giant, is marked to become the Wakayama casino operator, but it has already stated that it will be paying nothing for the IR’s construction.
Other mooted members of the Wakayama IR consortium, such as William Weidner’s AMSE Resorts Japan and esports entrepreneur Mario Ho, likely have less money to chip in than Clairvest.
Unless there are additional deep-pocketed consortium members, the project would need to rely mainly on bank financing, and there’s plenty of reason to think that most lenders won’t be jumping at the prospect.
Still, Clairvest did tell the prefectural assembly that it is “negotiating with megabanks.” It has also been reported that Project Manager Takeshi Kaji is working hard to bring about three other large Japanese companies into the consortium.
Brendan Bussmann, partner at Global Market Advisors, told Akihabara News last month that “Clairvest has a strong track record with the developments they have invested in by making sure they have a solid foundation of financial standing to complete the project. I would be surprised if it was anything less as it pushes forward with its consortium in Wakayama.”
Even if the consortium can somehow scrape together the US$4.3 billion, that would still leave it vulnerable to unexpected construction delays and costs, such as damage from earthquakes or typhoons, or perhaps a future wave of the pandemic.
No one wants to see a half-constructed eyesore in the middle of Marina City with no money left to do anything about it—much like what Saipan is now dealing with in relation to its Imperial Pacific International fiasco.
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