Kerzner International Holdings Limited, through its subsidiaries (collectively, "Kerzner" or the "Company"), a leading international developer and operator of destination resorts, casinos and luxury hotels, today announced that it has concluded its comprehensive restructuring to improve its capital structure and position it for sustainable, long-term growth as a global management company. As part of the restructuring, Kerzner has completed a transaction with the lenders to its Bahamian assets, including a fund managed by Brookfield Asset Management ("Brookfield Fund"), whereby Brookfield Fund has assumed ownership of these assets. As part of the transaction, Brookfield Fund has exchanged approximately $175 million of debt for Kerzner's equity interests in the Bahamian companies. Kerzner will continue to manage Atlantis Paradise Island and One&Only Ocean Club.
In addition, Kerzner has completed its previously announced agreement with its corporate lenders to amend its operating company debt facility. In connection with its operating company restructuring, Kerzner today announced that it has completed a transaction to sell its 50% ownership interest in Atlantis The Palm to its co-owner, Istithmar World PJSC ("Istithmar") for $250 million, the proceeds of which have been used to reduce Kerzner's operating company indebtedness. Following the closing of this transaction, Kerzner will continue to manage Atlantis, The Palm pursuant to a multi-year management agreement.
The completion of the global restructuring allows Kerzner to continue focusing on its role as a management company (with significantly reduced indebtedness) 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. 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. Kerzner, Brookfield Fund and Istithmar are aligned with regard to the best interests of the business moving forward including: keeping future capital expenditures and maintenance levels consistent with years past; maintaining current employment levels and investing the same level of resources into local and international marketing to support tourism 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, Chief Executive Officer 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 look forward to working with our business partners to provide our guests with an unparalleled experience. We can now focus our attention on growing The Atlantis and One&Only brands around the world. As always, we would like to thank our all of our employees for their hard work and continued commitment to Kerzner."
"We are thrilled to have concluded these transactions with our lenders, including Brookfield Fund," said George Markantonis, President and Managing Director, Atlantis, Paradise Island, Bahamas. "The transaction in the Bahamas is a very positive development for Kerzner and we look forward to continue investing in these regions for many years to come."
Brookfield Asset Management is a global asset manager with approximately $150 billion in assets and has an over 100-year history of owning and operating assets with a focus on real estate, infrastructure, renewable power and private equity. With decades of operating experience and over $83 billion of property assets they have developed an expertise in real estate investments that spans the globe.
Istithmar is a premier investment company with an international portfolio, including a broad group of hotels and commercial properties. Istithmar primary focus is on maximizing value and asset appreciation through a diverse portfolio.
Kerzner International has retained Kirkland & Ellis LLP as legal counsel and Blackstone as financial advisor.
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