Dubai spends US$250 mil. to gain control of Atlantis
By Adam Schreck, AP
April 30, 2012, 11:31 am TWN
DUBAI -- Dubai says it now has full control of the Atlantis resort hotel perched atop its palm-shaped island.
State-run investment firm Istithmar World said late Friday it paid US$250 million to buy out financially troubled business partner Kerzner International Holdings Ltd., which had held a 50 percent stake in the coral-colored hotel. Istithmar already owned half of the property.
Kerzner will continue to operate the resort, which includes a waterpark and 18 restaurants, Istithmar said.
It agreed to give up its stake in the Dubai property and a similar resort in the Bahamas after struggling to restructure US$2.6 billion in debt. Canada's Brookfield Asset Management acquired the Bahamas property in a previously announced deal by agreeing to waive US$175 million in debt owed by Kerzner.
Kerzner said it plans to use proceeds from the Dubai sale to reduce its debt load.
Istithmar is part of Dubai state conglomerate Dubai World, which has struggled with high-profile debt troubles of its own. It owns upscale retailer Barneys New York and has a stake in performance company Cirque du Soleil.
“This acquisition is in line with our strategy of managing our assets for value and investing selectively where growth opportunities exist,” Dubai World's chairman, Sheik Ahmed bin Saeed Al Maktoum, said in a statement.
Istithmar's parent Dubai World was at the heart of Dubai's financial meltdown in 2009. It signed an agreement to restructure some US$25 billion in debt last March.
The Atlantis is one of Dubai's better-known tourist destinations. It is a mainstay of city tours, vying for attention with the world's tallest tower, Burj Khalifa, and more traditional offerings such as the old gold and spice markets. Ads for the hotel greet Dubai airport passengers on arrival.
Atlantis opened for business in September 2008, shortly after a construction fire damaged part of the brightly painted lobby.
A lavish coming-out party for the resort two months later cost US$20 million and featured a celebrity guest list that included Robert DeNiro and Lindsay Lohan. Australian pop star Kylie Minogue provided the entertainment.
The 1,537-room hotel is at the top of the Palm Jumeirah, the first of Dubai's palm-shaped manmade islands and the only one that is developed. Visitors arrive by monorail or by traveling through an underwater tunnel.