As the September 9 deadline approaches, Kerzner International Holdings Limited is remaining tight- lipped concerning its negotiations with creditors as it seeks to extend maturities on $2.78 billion worth of debt.
“We remain in active and constructive discussions with our lenders,” said George Markantonis, president and managing director of Kerzner International Bahamas.
“It is company policy not to comment on rumors or speculation.”
The statement to Guardian Business comes after Bloomberg released a report on Tuesday, revealing that commercial, mortgage-backed securities might receive more than $100 million in principal for the two- year extension, according to sources.
Kerzner has built Atlantis resorts in Paradise Island and Dubai.
The corporation had already received a waiver on its operating company debt earlier this year, the report added. Blackstone LP and Kirkland & Ellis LLP are reportedly advising the company on its ongoing talks.
Requests for comment from Blackstone were not answered before press time.
James Smith, a former minister of state for finance and the chairman of CFAL, said while concern is mounting for the troubled corporation, Kerzner is likely too big to fail.
However, Smith pointed out that a default would prove “devastating” for The Bahamas.
“If the new owner is a vulture, they’ll strip the assets and sell them,” he said. “That could be devastating for employees. There are golf courses, real estate, condos, a sea park and the hotels.
“You could carve that up and sell it to different owners.”
Smith added that these changes would not come into effect right away. It’s likely the company would continue to function for as long as a year to provide it with a consistent source of revenue.
“If a default occurred, for the next year to 18 months they would have to keep it in place and continue to promote it until they can find a new buyer to take it over,” he said.
“It’s not the type of thing you can just walk away from.”
Back in April, Kerzner told Guardian Business that, regardless of the outcome, there would be no impact on employment at Atlantis.
“This exercise has no impact on operations, staffing levels or the quality of service at Atlantis today, nor will it have any in the future,” said the official statement.
Atlantis employs more than 8,000 employees in The Bahamas.
The Nassau Guardian