Prime Minister Hubert Ingraham advised this afternoon that Kerzner intends to transfer its ownership of the Atlantis Resorts and Paradise Island properties including the One and Only Ocean Club to Brookfield, a Canadian publicly-traded company with some $159 billion in assets.
Ingraham said that Brookfield has many years of operating experience and more that $69 billion of property assets giving them special expertise in real estate. The Atlantis Resort property will continue to be managed and operated by Kerzner International.
The Prime Minister said that he would make a fuller statement on the matter when Parliament meets this afternoon.
Statement by Prime Minister Hubert A. Ingraham
On Transfer of Ownership of Kerzner International Properties
Paradise Island
House of Assembly
29 November, 2011
Early this afternoon Kerzner International announced the reorganization of its business operations internationally including The Bahamas.
As I informed the press a few hours ago, Kerzner International proposes to transfer its ownership of the Atlantis Resort and Paradise Island properties, including the One and Only Ocean Club, to Brookfield Asset Management, a Canadian publicly-traded company with some $159 billion in assets. Brookfield is a well known Canadian Company with many years of operating experience and more than $69 billion of property assets giving them special expertise in real estate.
I advise Honourable Members that I have met with representatives of Brookfield on two occasions and held a number of additional meetings with Mr. Sol Kerzner in connection with the proposed change in ownership of the Paradise Island properties.
I confirm that the Atlantis Resort and the One and Only Ocean Club will continue to be managed and operated by Kerzner International.
As Honourable members will recall, Kerzner International, which first entered The Bahamas as Sun International in 1994 at a low point in our tourism performance, has been overwhelmingly responsible for the revitalization and expansion of the Bahamian tourism sector. Its development on Paradise Island created the premier warm weather destination in our region.
As the employer of nearly 8,000 Bahamians, Kerzner International is the single largest private sector employer in The Bahamas. It accounts for some 5% of our employed labour force. The 8,000 direct jobs at Kerzner attract an annual payroll of approximately $189 million. Each direct job at Kerzner creates an additional 1.25 to 1.5 indirect jobs in the economy – 10,000 to 12,000. In all therefore, some 18,000 – 20,000 jobs; 15% of all jobs in our economy, are related directly to the operations of Kerzner International in The Bahamas.
Additional contributions to the Bahamian economy from Kerzner’s operations include:
- Local purchases of goods and services – $190 million annually
- Electricity consumption of the order of $47 million paid annually to BEC
- Business Licence Fees – nearly $27 million annually (inclusive of Resort Hotel License Fees and Licenses for Joint Venture Time Share and Condominium Operations)
- Room Occupancy Tax – $20 million annually
Kerzner has also been a generous contributor to community and charitable causes most recently making a generous contribution to hurricane relief following the passage of Hurricane Irene.
The Resort has been a reliable partner with the Government in the development and maintenance of public spaces. Indeed, Kerzner has expended some $26 million on contributions to public parks and recreational space development, annual Independence Celebrations and Hurricane Relief. Kerzner International has also committed to make contributions of several million dollars toward the development of community programmes such as the Clifton Heritage National Park and the redevelopment of downtown Nassau. And, it is also underwriting most of the costs associated with the reclamation of Montagu Beach and the enhancement of the beach facilities at that popular Bahamian recreational space.
And, Honourable Members will recall Kerzner’s contribution to training programmes with The Bahamas Technical and Vocational Institute.
The acquisition of the Kerzner International’s Bahamian properties fits into the vision of Brookfield which has a strong cash flow and balance sheet permitting it to provide essential financial capital at a time of global economic and financial uncertainty.
This is especially important given our interest in ensuring that the new ownership of Atlantis will provide continued security of employment for the 8,000 Bahamians employed there.
I have been assured that Brookfield shares Kerzner’s commitment to continue future capital expenditure and maintenance of the Resort at levels sustained over the years, and further investing the same levels of resources into local and international marketing to support tourism in The Bahamas and to ensure the brand’s visibility.
Honourable Members are aware that the Government has always maintained excellent relations with Kerzner International as owner and operator of its Paradise Island properties and looks forward to the continuation of that relationship with Kerzner as operator and manager.
We likewise look forward to a strong working relationship with Brookfield.
I note that Kerzner’s transfer of its Bahamian assets to Brookfield will result in the conversion of that Company’s $175 million loan to Kerzner International into equity. Brookfield will now stand in Kerzner’s shoes in relation to Atlantis’ debt.
I wish to express the thanks and gratitude of the Government and the people of The Bahamas to Sol Kerzner for his many and varied contributions to The Bahamas most especially so in the creation of jobs, growing and expanding our tourism plant and making his attraction at Paradise Island a must see for hundreds of thousands of people.
