$2.4 billion Kerzner debt sent to servicer

Bloomberg reported on Thursday that US$2.4 billion in Kerzner International Holdings Ltd, Paradise Island, Bahamas debt has been sent to Wells Fargo & Co. to act as special servicer because of maturity default.

The news comes after a deal fell through with Brookfield Asset Management, Toronto to assume ownership of Atlantis Paradise Island and One & Only Ocean Club, both located in the Bahamas and a 50% stake in One & Only Palmilla located in San José del Cabo, Mexico in exchange for US$175 million in debt.

Kerzner had said the deal would further transition the troubled company from an owner and operator business model to third party management. Kerzner has struggled with cash flow issues as a result of the global economic downturn’s effect on tourism. Kerzner became a private company in 2006 following a US$3.8 billion buyout by the Kerzner family and private equity groups. The company’s long-time CEO Sol Kerzner recently stepped down.