OSAKA (Kyodo) A public-private entity operating the Osaka Dome baseball stadium effectively went bankrupt Monday.
Osaka City Dome Co. filed for special arbitration with the Osaka District Court in a bid to rehabilitate itself through a debt waiver or reduced interest payments.
The company is owned by the Osaka Prefectural Government, the Osaka Municipal Government and major Osaka-based private companies such as Matsushita Electric Industrial Co., Osaka Gas Co., Kintetsu Corp. and Kansai Electric Power Co.
The entity had incurred net liabilities of some 13.7 billion yen as of the end of March, company officials said.
The stadium was home to the Kintetsu Buffaloes since it opened in 1997. It will become the home of the Orix Buffaloes, a new baseball team to be created through a merger between Kintetsu and Orix.
“The ballpark was built as a multipurpose stadium, but the profits generated never matched the investment,” said Osaka City Dome President Takeshi Awai, who is to resign to take the blame for the company’s financial plight.
Osaka City Dome will continue to operate even after the district court steps in, company officials said.
An arbitration board to be established by the court to help decide the amount of debt waivers and how to repay the remaining debt will comprise financial experts and judges.
With the first court-sponsored meeting taking place in December, Osaka City Dome wants court arbitration settled by the end of this fiscal year, which ends March 31.
The company has been in the red since the beginning. Its outstanding debt swelled to 51.1 billion yen while its cumulative losses stood at 23.4 billion yen as of last March 31.
To help repay the debt, the company is planning to sell facilities related to the stadium to the city of Osaka for around 10 billion yen to 15 billion yen while asking for creditor financial institutions to forgive the rest, the officials said.
The Osaka Municipal Government is the largest shareholder of Osaka City Dome, owning a 20.6 percent stake.
Separately, Crysta Nagahori Co., another public-private Osaka entity which runs one of Japan’s largest underground shopping arcades, filed for similar arbitration with the Osaka District Court on Monday.
Crysta suffered net liabilities of 1.4 billion yen as of the end of March.
The Osaka Municipal Government is expected to come under fire for lax investment in the two loss-making projects using taxpayers’ money.
The two projects are not alone. In February, the municipal government was asked by legal authorities to pay about a combined 46.3 billion yen in connection with the bankruptcy of three other public-private entities owned by the city.
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