Kerzner International Holdings completes comprehensive restructuring

By Caroline Salls

Pittsburgh, April 27 - Kerzner International Holdings Ltd. has concluded its comprehensive restructuring, according to a company news release.

As part of the restructuring, Kerzner said it has completed a transaction with the lenders to its Bahamian assets, including a fund managed by Brookfield Asset Management, under which Brookfield Fund has assumed ownership of these assets.

The company said Brookfield Fund has exchanged about $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, the release said.

In addition, Kerzner said it has completed an agreement with its corporate lenders to amend its operating company debt facility.

In connection with its operating company restructuring, Kerzner said it has completed a transaction to sell its 50% ownership interest in Atlantis The Palm to co-owner Istithmar World PJSC for $250 million.

The proceeds of the ownership interest sale have been used to reduce Kerzner's operating company debt.

Following the closing of this transaction, Kerzner said it will continue to manage Atlantis, The Palm under a multi-year management agreement.

According to the release, the completion of the global restructuring allows Kerzner to continue to focus on its role as a management company. Kerzner said it will continue to own the Atlantis and One&Only brand names and retain the right to develop additional resort properties under these names.

"With substantially less debt and a more flexible operating structure, Kerzner is well positioned for sustainable long-term growth as a global management company," chairman Sol Kerzner said in the release.

"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."

Chief executive officer Alan Leibman said in the release: "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."

The company has retained Kirkland & Ellis LLP as legal counsel and Blackstone as financial adviser.

Kerzner International is based in Paradise Island, the Bahamas.

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