The Atlantis Paradise Island resort
By Alison Lowe
Nassau Guardian Business Editor
NASSAU, Bahamas -- An investment arm of the Dubai government has bought a major stake in Kerzner International Holdings, the international hotel operator that manages the Atlantis Paradise Island resort, and has replaced the company’s founder and chairman, Sol Kerzner.
The move by the Investment Corporation of Dubai (ICD) to buy the stake from the family of the company’s founder and several institutional investors, comes two years to the month that Kerzner sold its flagship properties – Atlantis Paradise Island and Atlantis The Palm – to creditor Brookfield Asset Management (BAM) and partner Dubai World in a debt restructuring.
A spokesperson for ICD declined to comment when asked exactly what stake the corporation had taken in Kerzner International Holdings, which is also part-owned by Goldman Sachs and California-based Colony Capital. However, Guardian Business has learned that the shareholding is not a majority one, and the Associated Press reported that ICD would take a stake of 46 percent.
With the completion of the buy-out, Sol Kerzner, the visionary business magnate behind the establishment of Atlantis on Paradise Island, has been replaced as chairman by CEO of ICD, Mohammed Al Shaibani.
In an emailed response to the Nassau Guardian, a Kerzner spokesperson said the buy-out and departure of Sol Kerzner from the company would not alter its strategy in a way that would impact its Bahamas operations.
Kerzner International Holdings continued as a resort management, development and branding company responsible for the management of Atlantis and the One&Only Ocean Club after it divested of these assets in 2012.
“This does not alter our strategy led by Alan Leibman (Kerzner International Holdings CEO), Kerzner continues to focus on positioning the business for long-term, sustainable and global growth through our asset-light business model. We will continue to build world-class, must-see entertainment resort destinations and ultra-luxury resorts and hotels in the most spectacular locations and provide amazing experiences for our guests.”
In a statement issued to Guardian Business, Leibman said: “Kerzner is entering an exciting new chapter in our business. We are happy to have ICD as a major shareholder as they recognize the value driven by the world-class experiences and destinations delivered by the Kerzner brands. We look forward to their support as we continue to execute on our global growth strategy.”
Leibman described Sol Kerzner as a man who “truly impacted the entire world of hospitality and created the entertainment destination resort concept.”
“Personally, he has been a great mentor to me throughout my career. I am looking forward to continuing to grow the company that he founded and take it to the next level with new projects and developments around the world,” he added.
George Markantonis, president and managing director of Atlantis for Brookfield Hospitality, the Paradise Island-based resort’s owner, declined to comment on the transaction but paid tribute to Kerzner’s role in building Atlantis and the company.
“We’re just happy that Mr Kerzner will get a chance for some well-deserved rest. The good news is that he has a home in Ocean Club Estates, and so hopefully we’ll get to see more of him.”
Markantonis said that Brookfield’s primary focus at this time is on the refinancing of its $2.3 billion in debt, an effort which must be concluded within this year.
“It’s a critical step and it’s very important it gets done. I’m very optimistic we will see a resolution in the next few months. I do know our company intends to finish the refinancing much sooner than September 2014 (the deadline set by its creditors).”
Sources contacted by the Nassau Guardian said that they did not foresee that Kerzner’s departure would have a major impact on operations at the Atlantis resort or the One&Only Ocean Club property, despite the fact that he had played an active role as chairman. Brookfield Hospitality was said to be significantly more of a determinant of the overall strategic direction of the property, being primarily responsible for decisions on capital expenditures, among other important elements.
In a statement, Al Shaibani said the investment in Kerzner International Holdings comes on the back of Dubai’s push to boost its hotel and tourism industry as the city prepares to host the World Expo in 2020.
“This investment reaffirms ICD's commitment to support the long-term growth of our domestic hospitality market, a key pillar of and growth sector for the Dubai economy,” Al Shaibani said.
ICD’s holdings include the Middle East's biggest airline Emirates and a stake in Emaar Properties, the builder of the world’s tallest tower, the Burj Khalifa.
Republished with permission of the Nassau Guardian