The four-year management agreement Kerzner International has entered into with the new owners of the Atlantis Resort requires the company to meet revenue standards in the first year of the contract that it last achieved in 2008, The Nassau Guardian has confirmed.
The revenue targets have important implications for job security at Paradise Island.
If Kerzner International, as the manager of the Paradise Island properties, fails to meet those targets then jobs could be threatened, The Guardian understands.
In the second year of the management agreement, Kerzner is required to hit an even higher revenue threshold, The Guardian confirmed.
The management agreement calls for Kerzner officials to meet gross earnings of $215 million at the end of the first year of the contract, according to a source.
The new owners also require Kerzner to bring in earnings of $235 million thereafter.
Kerzner's current EBITDA is $175 million.  This important revenue benchmark is calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.
Under the agreement, which has not yet been made public, Kerzner International will receive two percent of the company's gross revenue for managing Atlantis and the One&Only Ocean Club, The Guardian confirmed.
Canadian asset management firm Brookfield Asset Management was previously one of Kerzner International's lenders and has become the new owners of the Paradise Island properties.
On Monday, The Nassau Guardian reported that in late November, government had concerns that jobs would be at risk if those high revenue thresholds are not met, despite public assurances from Prime Minister Hubert Ingraham and Kerzner International officials that there is no need for staff to fear job losses.
In November, Ingraham provided details on the deal -- one of the most significant developments for the country's largest private employer -- but there are other crucial components connected to the sale which are only now coming to light.
According to a well-placed source, the government intentionally withheld key parts of the deal from the public so as not to create 'panic' among the more than 7,000 employees on Paradise Island.
For instance, The Nassau Guardian confirmed that some managers at Kerzner have shares in the parent company that amount to $11 million, the value of which government officials fear could decline significantly due to the takeover.
It is also understood that Brookfield can terminate its four-year management contract with Kerzner at any time, subject to a penalty fee, if it brings on a new partner or if Kerzner does not meet its revenue targets.
The Progressive Liberal Party (PLP) has called on the Ingraham administration to make public the management agreement between Kerzner and Brookfield in order to put staff layoff concerns to rest.
Democratic National Alliance (DNA) Leader Branville McCartney has also demanded answers.
As he spoke to the House of Assembly on the Atlantis ownership change in November, the prime minister said he received assurances that the jobs at Kerzner's Paradise Island properties would remain secure.
As widely reported, Brookfield has agreed to exchange $175 million in debt for Atlantis, One&Only Ocean Club on Paradise Island and One&Only Palmilla in Mexico. The deal came after months of speculation over Kerzner's delays in restructuring its $2.3 billion mortgage, of which the Paradise Island properties were held as collateral.
The use of the Bahamian holdings as collateral for debt held overseas was approved during the Christie administration.
In November, Ingraham criticized the PLP leader for allowing the properties to be held as security for international creditors.

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