PARADISE
ISLAND, The Bahamas--November 29, 2011--Kerzner International Holdings
Limited, through its subsidiaries (collectively, “Kerzner
International” or the “Company”), a leading international developer and
operator of destination resorts, casinos and luxury hotels, today
announced that it has shifted its forward business strategy from that
of owner / operator to that of a management company under which it will
continue to grow the Atlantis and One&Only Brands world-wide.
Consistent with this strategy, Kerzner has entered into an agreement in
principle with its corporate lenders to amend its operating company
debt and has also entered into an agreement in principle with the
lenders to its Bahamian and Mexican assets, including a fund owned by
Brookfield Asset Management (“Brookfield”), which will see Brookfield
assume ownership of these assets subject to management contracts with
the Company. Brookfield has agreed to exchange approximately $175
million of debt for the equity of the Bahamian and Mexican companies.
“This transaction will permit Kerzner to move forward as a management
company, allowing us to get back to doing what we do best – designing
and managing world-class destination and luxury resorts under the
Atlantis and One&Only brands,” said Sol Kerzner, Chairman and CEO
of Kerzner International. “As part of this arrangement, Kerzner will
enter into a management contract with Brookfield to continue managing
the day-to-day operations at Atlantis Paradise Island, One&Only
Ocean Club and One&Only Palmilla. As the manager of these
locations, Kerzner will remain in control of all aspects of running
these businesses and the resorts will continue to operate as they
always have. Kerzner and Brookfield 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 maintain brand visibility. Kerzner currently has
varying levels of ownership interest in the hotels and resorts it
manages around the world, including a number of resorts in which it
holds no ownership interest. Kerzner will continue to own the Atlantis
and One&Only brand names and retains the right to develop
additional resort properties under these names.
“For some time now, we have been actively engaged in constructive
discussions with our various lender groups in order to improve our
company’s capital structure, optimize the value of our assets and
position Kerzner for sustainable long-term growth as a global
management company,” continued Kerzner. “Today’s announcement is an
important step towards that goal, allowing Kerzner to substantially
reduce debt and streamline our balance sheet and operating structure.
We would like to thank our employees for their ongoing dedication, and
our guests, suppliers and business partners for their support. We look
forward to continuing our mission as one of the world’s finest luxury
hospitality management companies and we remain committed to blowing our
customers away each and every time they stay with us.”
Brookfield 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, power and private equity.
With decades of operating experience and over $69 billion of property
assets they have developed an expertise in real estate investments that
spans the globe.
The transaction is conditioned upon the negotiation of definitive
documentation and other customary requirements, including Bahamian
governmental approvals and consents, and is expected to close by
year-end.
In connection with Kerzner’s focus on developing its management company
platform and strengthening its balance sheet, Kerzner has also entered
into an agreement in principle with its corporate lenders to amend the
operating company’s debt, which is subject to documentation and other
closing conditions related to the Company’s overall restructuring. It
is expected that all of these transactions will close simultaneously.
Kerzner International has retained Kirkland & Ellis LLP as legal
counsel, Blackstone as financial advisor and Zolfo Cooper as
restructuring advisor.
Kerzner International Holdings Limited, through its subsidiaries,
is a leading international developer and operator of destination
resorts, casinos and luxury hotels. Kerzner’s flagship brand is
Atlantis, which includes Atlantis, Paradise Island, a 2,317 room
ocean-themed destination resort in The Bahamas, as well as The Cove
Atlantis and The Reef Atlantis in The Bahamas and Atlantis, The Palm,
Dubai, a 1,500-room, water-themed resort on The Palm, overlooking the
Arabian sea and mainland Dubai. Under the One&Only brand, Kerzner
also manages seven of the top-rated luxury resort properties in the
world, located in The Bahamas, Mexico, Mauritius, the Maldives, South
Africa and Dubai. Additionally, the Mazagan Beach Resort, a 500-room
destination casino resort in Morocco, is also operated by Kerzner. For
more information concerning Kerzner and its operating subsidiaries,
visit kerzner.com.
FORWARD LOOKING STATEMENT
Statements in this release which are not purely historical facts,
including statements about anticipations, beliefs, expectations, hopes,
intentions or strategies for the future are forward-looking statements.
Readers are cautioned not to place undue reliance on forward-looking
statements. All forward-looking statements are based upon information
available to the Company on the date this release was submitted. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Any forward-looking statements involve
risks and uncertainties that could cause actual events or results to
differ materially from the events or results described in the
forward-looking statements.