Osaka prefecture in western Japan plans to sell a commuter rail line to Nankai Electric Railway Co. for 75 billion yen ($732 million).
The Osaka government will begin talks with Nankai Electric Railway on a sale of Osaka Prefectural Urban Development Co., Governor Ichiro Matsui said today on a webcast of the prefectural assembly meeting. The state-backed company operates Semboku Rapid Railway, a commuter line used by more than 50 million people annually.
The negotiations come after the Osaka government canceled the 78.1 billion yen sale of the rail operator to Lone Star Funds in December, after local lawmakers rejected the U.S. private-equity firm as the winning bidder. The sale of the company, founded in 1965, is part of Matsui’s efforts to cut public debt.
The government aims to finalize a deal with Nankai Electric Railway in the next fiscal year, which starts in April, Matsui said. Osaka’s government owns 49 percent of Osaka Prefectural Urban Development, with the remainder controlled by private investors including Osaka Gas Co. and Kansai Electric Power Co.
Fifty-three of 104 assembly members voted against Lone Star’s offer to buy the government-backed railway and logistics company, according to a Dec. 16 webcast of the tally. Lone Star was picked as the winner in November by a government committee, beating offers from Nankai Electric and Fortress Japan Investment Holdings LLC.