"Japan May Set Limits on Airport Privatization Including Narita"

Wednesday, December 5, 2007

Japan May Block Investors From Controlling Airports
By Hiroshi Matsui and Chris Cooper
Bloomberg


Japan's government, set to sell shares in Narita International Airport
Corp., may prevent investors from taking a controlling stake to ensure
long-term expansion. 

``We can't build another Narita, so we don't want to take risks with its
sale,'' Hisayasu Suzuki, director general of Japan's Civil Aviation Bureau,
said in an interview yesterday. ``We should make sure that investors don't
just focus on short- term profits.'' 

The government wants to sell stakes in Narita, Tokyo's main international
gateway, and other airports to encourage competition and to help cope with
rising travel demand. The government may retain control of airports through
so-called golden shares with special voting rights, according to Suzuki. 

``Having a golden share would ensure that long-term operations are stable,''
said Osuke Itazaki, an analyst at Credit Suisse Group in Tokyo. Still, ``it
wouldn't necessarily be good for investors in the short-term.'' 

Other state-owned companies, including units of Japan Post Holdings Co., are
also being privatized to help reign in the expansion of the nation's debt. 

The Narita Airport share sale may take place in the fiscal year starting
April 2009, according to company President Kosaburo Morinaka. Suzuki
declined to say when it would happen. 

Ownership Rules 

The aviation bureau will propose new airport ownership rules in the regular
parliament session starting next year. These will cover Narita, Tokyo
Haneda, the world's fourth- busiest airport, Kansai International Airport
near Osaka and other domestic airfields. 

Japan Airport Terminal Co., already listed in Tokyo, will also be covered by
the rules, even though it only operates the terminals and not the runway at
Haneda airport, Suzuki said. 

The company, 20 percent owned by a group led by Australia's Macquarie
Airports, rose 1.6 percent to 2,225 yen on the Tokyo Stock Exchange at the
close of trading. The stock is up 59 percent this year, compared with a 9
percent decline in the Topix index. 


Narita, east of Tokyo, will extend one of its two runways by 2010, allowing
it to boost the number of takeoffs and landings 2.1 percent to 193,000 a
year. The government also plans to add another runway at Haneda, the
country's biggest domestic airport and Asia's busiest. 

The government made Japan Post, a combination of banking and insurance
operations as well as the country's mail deliverer, a private company on
Oct. 1. It plans to sell stakes in two financial units. Japan has previously
sold off the country's former rail and telecoms monopolies.


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