Bloomberg: Kerzner International Holdings Ltd., the company that built the Atlantis resorts in the Bahamas and Dubai, is in talks with creditors to extend maturities on US $2.78 billion of mortgages due next month, according to three people familiar with the discussions.
Holders of commercial mortgage-backed securities may receive more than $100 million of principal in exchange for the two-year extension, said the three sources, who asked not to be named due to the confidential nature of the discussions.
Kerzner may default on the debt, due September 9, unless a deal is reached, they said. It received a waiver on its operating company debt earlier this year, one of the sources revealed.
The company, which also runs seven One&Only resorts, has struggled with debt since the 2008 financial crisis reduced hotel values and room rates.
Kerzner’s owners include Dubai World’s Istithmar, Goldman Sachs Group’s Whitehall Funds, Colony Capital and founder Sol Kerzner.
Blackstone Group and Kirkland & Ellis are advising the company on its ongoing restructuring talks while Centerview Partners is advising Sol Kerzner and Moelis & Co is advising Dubai World, one of the people said.
Brookfield Asset Management is among the holders of Kerzner International’s mortgage debt, three sources said. More than $1.4 billion of the debt was sliced up and sold as bonds, according to data compiled by Bloomberg.
Representatives of Blackstone, Kirkland and Moelis declined to comment on the talks. Representatives of Kerzner and Centerview weren’t immediately available to return messages.
Kerzner, famous for Atlantis’ Mayan-themed water slides and up-close encounters with dolphins, sharks and rays, was taken private in 2006 for $3.6 billion by a group led by its namesake founder.
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