Atlantis granted extension on restructuring

Mon, Sep 12th 2011, 10:36 AM

Kerzner International has won an extension on an anxiously awaited $2.6 billion mortgage debt restructure, Guardian Business can confirm -- something a local analyst has termed "not unusual".
In a statement Friday, a Kerzner spokesperson said the restructuring process is ongoing with its lenders.
"We can confirm that Kerzner has received an extension from our lenders and we continue to be in active and constructive discussions with them," read a statement sent to Guardian Business from the company.  "It remains business as usual at all of our properties and resorts."
The comments follow several months of waiting for Kerzner International to finalize the restructuring of its mortgage debt.
The extension is not surprising, said C-FAL Chairman James Smith, given the current credit market and its affect on all businesses.
He points to recent decisions by several global agencies to revise the outlooks for both countries and companies alike.
Kerzner, he said, was not likely to be excluded from this approach.
"Credit markets are pretty cautious," he said.
"They are better off trying to ride out this recession. . . because it doesn't serve anyones interest to foreclose now.
"Economies depend on them [Kerzner properties] for jobs. . .  and there is no one out there to take that one right now."
While a sale of the local Atlantis property had once been feared, recent international reports suggest the Atlantis' resort in Dubai might actually be on the property chopping block.  Kerzner International Holdings was said to be seriously considering the sale of its 50 percent stake in that property.
It's an outcome an international hotel analyst, speaking earlier to The Guardian on the condition of anonymity, saw coming and was never overly concerned about the situation potentially sparking a sale of the Atlantis property in The Bahamas.
"I don't think they would sell it," the well-connected source said.  "Their best bet is to extend it and give Kerzner time to recover.
"Occupancy and rates can pick up and in the Caribbean it's starting to pick up after two down years.  So the value of Kerzner's assets will probably increase and they will be able to meet their debt services."
BMB Group, an investment firm that manages wealthy Middle East and Asian clients, sent a letter on October 11 to the founder of Kerzner International Sol Kerzner, offering to pay between $3.4 billion to $4 billion for the company, Guardian Business reported last year.  The company received the letter, but made it clear that Kerzner wasn't for sale.
In a statement from Kerzner International, the company said: "We received an unsolicited letter from BMB, but Kerzner is not for sale."
Like many other hotel properties around the world, Atlantis has been hit by the economic downturn and its effect on consumer spending on items like luxurious vacations in The Bahamas.

Click here to read more at The Nassau Guardian

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