Kerzner may sell Dubai resort stake
Dubai, August 31, 2011
Luxury resort operator Kerzner International Holdings may sell its 50 per cent stake in the Atlantis resort in Dubai to raise money to restructure $2.6 billion in mortgage debt coming due next week, the Wall Street Journal reported, citing sources.
The Bahamas-based company is in talks to sell the stake to Istithmar World, Dubai's investment arm, people familiar with the matter told the Journal on Tuesday.
The sale, if consummated, could reap as much as $250-$350 million, the people said.
The proceeds would go toward paying down a portion of the mortgage debt on a separate Atlantis resort in the Bahamas, Kerzner's flagship property and one of the most popular resorts in North America, the report said.
Kerzner International has been in talks with creditors to extend maturities on its debt due next month.
The company was taken private in 2006 by its chief executive and founder, Sol Kerzner, leading a consortium of investors including Dubai's Istithmar, Colony Capital and Providence Equity Partners.
If Kerzner doesn't soon sell the Dubai Atlantis stake and get a wider restructuring deal done, creditors are likely to grant short grace periods to effectively push back by a few weeks the due date on the company's mortgage, the Journal reported.
The sale discussions remain fluid and might fall apart, the people said.-Reuters