The conglomerate that acquired Atlantis has injected an additional $25 million in capital into the property after brokering a deal with Kerzner International.
The disclosure, included within Brookfield Asset Management’s interim report, details how a real estate fund – namely, Brookfield Real Estate Finance Fund – completed the $175 million debt-for-equity swap last April.
The report revealed how the total investment, however, was approximately $200 million, after an additional $25 million of capital was injected. Brookfield Asset Management, the parent company, only contributed $70 million towards the Paradise Island takeover.
“Atlantis is owned by the Brookfield Real Estate Finance Fund, a former lender to the resort. Brookfield Asset Management manages that fund, and is a major investor in the fund. There are also a number of institutional investors in the Brookfield Real Estate Finance Fund,” said Andrew Willis, Brookfield’s senior vice-president of communications and media. “What Bruce Flatt (CEO of Brookfield) explained in the Q2 shareholder letter is that Brookfield Real Estate Finance Fund took part in the transaction at Atlantis with a total value of $200 million, and of that total, Brookfield Asset Management’s share is $70 million.”
Willis was unable to elaborate on how the additional $25 million was spent at the mega resort.
George Markantonis, the president and managing director of Kerzner International (Bahamas), was unable to comment before press time.
However, Guardian Business understands that the renovation of 600 rooms in the Royal Towers is considered a major capital expenditure over the coming year. The $25 million, however, would fall 50 percent short of the $50 million expected capital injection budget, as laid out by the government at the time for the transaction.
The former government also imposed certain employment expectations and a budget for marketing endeavors.
Listed in the New York Stock Exchange, the Canadian multinational generated $244 million of funds from operations and $272 million of total return for common shareholders during the quarter.
As with Atlantis, Brookfield’s objective is to invest in high-quality, simple-to-understand assets which earn a cash return on equity and high appreciation potential. Low interest rates and hard economic times have only intensified the company’s hunt for valuable assets.
Back in April, Markantonis announced Brookfield was “open minded” concerning projects at the Paradise Island resort. He confirmed to Guardian Business that apart from the Royal Towers, there are no plans for new attractions at the resort this year.
Brookfield also acquired a 100 percent equity interest in the One&Only Ocean Club through the deal with Kerzner International.
Jeffrey Todd
Guardian Business Editor
jeffrey@nasguard.com
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