Kerzner transfers Atlantis resort to Brookfield
UPDATE 1-Kerzner transfers Atlantis resort to Brookfield
Tue Nov 29, 2011 6:57pm GMT
NASSAU, Bahamas Nov 29 (Reuters) – Kerzner International Ltdunveiled on Tuesday a debt-for-equity restructuring that will transfer ownership of its Atlantis mega resort in the Bahamas to a Toronto real estate and asset management company.
The resort owner and operator, which has been locked in negotiations with lenders over its $2.6 billion debt mountain for some time, said in a statement it was transferring equity ownership of Atlantis and its One & Only Ocean Club properties in the Bahamas, plus the One & Only Palmilla in Mexico, to Brookfield Asset Management Inc .
Brookfield is exchanging $175 million worth of Kerzner International’s debt in return.
The deal effectively transforms Kerzner International into a resort management company, as opposed to its previous status as an owner-operator.
It will continue to manage the Atlantis and two One & Only properties for Brookfield, and focus on growing both brands worldwide.
Sol Kerzner, Kerzner International’s chairman and chief executive, said: “This transaction will permit Kerzner to move forward as a management company, allowing us to get back to what we do best — designing and managing world-class destination and luxury resorts under the Atlantis and One & Only brands.”
Kerzner International will continue to own rights to both brands, and Kerzner said Brookfield and the company were in agreement to maintain employment levels at the two Bahamian resorts, along with marketing and capital investment.
Kerzner said the agreement, which requires Bahamian government approval, would “substantially reduce our debt and streamline our balance sheet and operating structure.”
The restructuring is expected to close by 2011 year-end.
