Kerzner International Holdings Ltd., the company that built Atlantis resorts in the Bahamas and Dubai, faces a loan covenant test that may trigger a default as soon as next month, people with knowledge of the matter said.
The company, which also runs seven One&Only resorts, may fail the test on an estimated $450 million loan, said the people, who sought anonymity because the situation is private. Centerbridge Capital Partners LP and TPG Capital are among the largest holders of the debt, which is backed in part by management contracts and equity in some properties, they said.
A default on so-called operating company debt may lead to the refinancing of Kerzner’s $3 billion total debt, asset sales or ownership changes, according to the people. The company, whose owners include Dubai World’s Istithmar, Goldman Sachs Group Inc. (GS)’s Whitehall Funds, Colony Capital LLC and founder Sol Kerzner, has struggled with debt since the 2008 financial crisis sank hotel values and reduced room rates.
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