Hotel group announces $250m deal with Dubai World unit as part of restructuring plan
Kerzner International Holdings Limited has sold a 50 percent stake in Atlantis, The Palm in Dubai to resort co-owner Istithmar World, a unit of Dubai World, for $250m.
The deal was announced as part of the company's comprehensive restructuring to improve its capital structure and "position it for sustainable, long-term growth as a global management company", a statement said.
Kerzner has also handed ownership of Bahamas-based Atlantis Paradise Island, and the adjacent Bahamas One&Only Ocean Club to creditor Brookfield Asset Management.
Brookfield will forgive about $175m of junior debt as part of the deal, the statement added.
Following the closing of this transaction to make Istithmar the sole owner of the hotel, Kerzner said it will continue to manage 1,500-room Atlantis, The Palm as part of a multi-year management agreement.
Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Dubai World, said: "The performance of The Atlantis continues to exceed our expectations. This deal, allowing us to become the sole owner of Atlantis, The Palm Dubai, effectively consolidates our investment in one of our best performing assets, and one of Dubai's landmark properties.
"This acquisition is in line with our strategy of managing our assets for value and investing selectively where growth opportunities exist."
"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."
He added: "We are committed to working together with Brookfield Fund, Istithmar and our other partners to continue blowing away our customers at all of our resorts and properties around the world."
He said current employment and investment levels and investing the same level of resources into local and international marketing to support tourism would be maintained in The Bahamas and Dubai.
"Today's announcement significantly accelerates our strategy of shifting from an owner and operator to a management company and allows us to focus on managing all of our resorts and properties," said Alan Leibman, CEO of Kerzner International.
"Kerzner will remain in control of all aspects of running its properties and it will continue to operate seamlessly as it always has.
"We can now focus our attention on growing The Atlantis and One&Only brands around the world."
Brookfield Asset Management is a global asset manager with approximately $150bn in assets.