Government-owned New Kansai International Airport Co. is working with the brokerage unit of Sumitomo Mitsui Financial Group Inc. to sell rights to operate two of the country's largest airports, sources said.
SMBC Nikko Securities Inc. will advise New Kansai as it prepares an auction of rights during the fiscal year that starts next month, said the sources, who asked not to be identified discussing a private process. New Kansai is selling the rights to run two airports in the western Japanese prefecture of Osaka.
Prime Minister Shinzo Abe's government is privatizing government-run airport operations for the first time in a bid to cut public debt and attract private investment. New Kansai plans to use proceeds from the concession sales to reduce its debt, which stood at ¥1.2 trillion as of March 2013, according to the company's latest financial statement.
New Kansai operates Kansai International Airport, which opened in 1994 and sits on reclaimed land in Osaka Bay, as well as Osaka International Airport, which was built in 1939 and now focuses on domestic flights. The company plans to select an operator by March 2015, the sources said.