Istithmar PJSC and Kerzner, that formed the joint venture company named Kerzner Istithmar Limited were reported to have signed the financing agreement with a consortium of banks.
Abu Dhabi Commercial Bank, Barclays Capital, the investment banking division of Barclays Bank PLC, The Commercial Bank of Dubai PSC, Emirates Financial Services PSC, the investment banking arm of Emirates Bank and HSBC Bank plc, (together the ‘Mandated Lead Arrangers’) were appointed to handle the loan facility which is for a period of 12 years.
“We are pleased that this landmark and strategic project is matched by the first of its kind financing in the region,” said Sultan Bin Sulayem, Executive Chairman of Istithmar. “Achieving a non-recourse financing deal of this size outside the power and petrochemical sector is truly a landmark transaction for the region.”
The financing is actually intended to be used for the construction and furnishing costs and other related expenditures for the project’s opening.
The plan involves the construction of two hotels with some 2,000 rooms, conference and meeting facilities and the largest aquatic theme park in that part of the world.
The development is expected to be constructed on The Palm, Jumeirah, the multi-billion dollar leisure and residential island in Dubai.
In its annual report that was released recently, Kerzner International reported that the total development cost of Atlantis, The Palm will be approximately $1.2 billion, excluding an adjacent residential condominium development that is anticiapted to be developed and financed through pre-sales.
According to the report, Kerzner was expected to contribute $125 million for a 25 percent equity interest, with Istithmar providing the balance of the equity financing for the newest Atlantis project.
According to the arrangements that were announced this week, the development would be jointly financed through the $700 million loan facility and $500 million in equity, subscribed by the sponsors and third party investors.
The property was designed as the premier destination resort and entertainment centre in Dubai and will be central to the Government of Dubai’s goal of increasing tourism to the Emirate and achieving its goal of 15 million overnight visitors by 2010.
The Dubai government was said to be continuing to make a massive investment in infrastructure with a $4 billion expansion underway at the Dubai International Airport. There are flights from over 150 cities to that destination, something that Kerzner classified as outstanding.
Airport officials had anticipated increasing the annual passenger capacity from 22 million to over 70 million by 2008.
In advance of construction, site work on Atlantis, The Palm began in late 2004. Construction is scheduled to commence later in 2005 and completion of the project is expected by mid 2008.
By: , The Bahama Journal
