Kerzner International ceded ownership of its flagship Atlantis Paradise Island as well as two other properties as part of a debt restructuring deal.
After a similar deal fell through in January, Kerzner sold its 50% stake in Atlantis The Palm, located in Dubai, United Arab Emirates, to the property’s co-owner Istithmar World, a subsidiary of Dubai World, Dubai, for US$250 million. Kerzner also sold its Atlantis Paradise Island and One & Only Ocean Club, both located in the Bahamas to Brookfield Asset Management, Toronto, in exchange for US$175 million in debt forgiveness. Kerzner will continue to manage each property.
The deal reduces Kerzner International Holdings Ltd, Paradise Island, Bahamas, to a third-party management company, under which it will continue to own the Atlantis and One & Only brand names and retain the right to develop additional resort properties under these names.
“We are pleased to have reached a successful conclusion to our comprehensive restructuring, which significantly strengthens the company’s financial profile,” said Sol Kerzner, chairman of Kerzner International. “With substantially less debt and a more flexible operating structure, Kerzner is well positioned for sustainable long-term growth as a global management company.”
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.