IHI Corp. has decided to liquidate a joint venture for the development of the GX medium-size rocket following the government's decision to scrap a public-private sector development project, sources said Saturday.
Heavy machinery maker IHI is expected to book an extraordinary loss of about ¥10 billion for the liquidation of Galaxy Express Corp., which was established in 2001.
IHI, which has a stake of more than 40 percent in the rocket development company, plans to hold talks over the liquidation with other shareholders, including Mitsubishi Corp. and Kawasaki Heavy Industries Ltd., they said.
IHI made the decision to terminate the joint venture after concluding that the business would not be feasible without government involvement, the sources said.
The government canceled the rocket development project late last year in a bid to eliminate wasteful spending. It determined the project was not economically viable after estimating that an additional ¥94 billion would have been needed to complete the rocket.
A total of about ¥70 billion has already been spent on the project, with the private sector shouldering about ¥43 billion.
The project began in 2003 with the state-run JAXA, IHI and U.S. defense contractor Lockheed Martin Corp. taking part.