The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The One & Only Ocean Club’s new owner has set its sights on developing a convention centre, after closing the Paradise Island property’s purchase for $140.5 million.

Khaalis Rolle, minister of state for investments, disclosed that Access Industries’ acquisition also included the purchase of a six-acre site between the RIU Hotel and Sunrise Beach Villas for “future development” and expansion possibilities.

He added that “renovation and expansion” at the One & Only Ocean Club would “include construction of a convention centre”, with all existing employees at the 105-room resort retaining their jobs.

Access Industries, the company controlled and founded by its billionaire chairman, Ukrainian-born Len Blavatnik, confirmed late last week that it had closed the One & Only Ocean Club’s purchase from Brookfield Asset Management - a deal first revealed by Tribune Business in mid-March.

This newspaper also exclusively revealed Mr Blavatnik and Access to be the purchasers over one month ago, and the buyers confirmed that Kerzner International and its One & Only brand would remain as the Ocean Club’s manager/operator.

“The Ocean Club has a storied history as one of the most exclusive destinations in the Caribbean. We are pleased to include this unique property in Access’ portfolio of iconic hotels, and we look forward to working with Kerzner’s experienced management team to bring the resort to a new level of excellence,” said Mr Blavatnik in a statement.

“We will invest in and continue to enhance the property to provide discerning global travellers the ultimate luxury experience in the Caribbean,” said Jonah Sonnenborn, Access Industries’ head of real estate.

“The uniqueness of the property will be celebrated and enriched to provide our guests with a sophisticated, yet relaxed experience. We look forward to working with our neighbours on Paradise Island, the Bahamian government and Kerzner at this distinctive property.”

Tribune Business was also able to confirm that Kerzner International’s 15-year management contract, via the One & Only brand, remains intact with no terms changed as a result of the new ownership.

It had been granted the 15-year term by Brookfield, and a Kerzner spokesman yesterday confirmed: “2027 is still the deal.”

Brookfield was a notable absentee from the press release confirming the purchase, and a spokesman declined to comment when contacted by Tribune Business.

But it is possibly no coincidence that the Ocean Club deal has closed in time to meet its end-June deadline for refinancing the $2.3 billion debt it inherited from Kerzner in the 2012 debt-for-equity swap that saw it take over ownership of Atlantis and the Ocean Club.

It is unclear what Brookfield will do with the $140.5 million sales proceeds, but Tribune Business understands a portion is likely to be used as part of the new financing arrangements worked out with Atlantis’s lenders. The funds could be used as a ‘cash downpayment’ to the lenders as part of restructured financing arrangement.

This newspaper also understands that Brookfield is still targeting the end of this month to complete the refinancing, even though it has until September 2014.

Tribune Business previously reported that Brookfield, which has $175 billion in property and worldwide assets under management, was in no rush, and not under any pressure, to exit the Paradise Island resort assets.

Its position all along has been that it will only sell ‘if the price is right’ and the buyer meets its valuation. This newspaper’s sources previously indicated that a sales price of between $85 million to $130 million was being discussed for the Ocean Club, and with the final price exceeding the latter by more than $10 million, it appears this strategy has borne fruit.

And, optimistic about what Access Industries brings to the table, Prime Minister Perry Christie told the House of Assembly during the 2014-2015 Budget presentation: “The injection of additional capital into the upgrading and expansion of the Ocean Club by Access Industries not only assures further direct investment inflows into the Bahamas economy, but additional jobs, the positioning of the Ocean Club as the nation’s premier ultra-luxury resort, and a partnership to leverage other economic expansion opportunities with a worldwide conglomerate.”

Access Industries’ hospitality portfolio included the Saxony Hotel in Miami, which is part of a one million-plus square foot district it owns in Miami Beach. In France, Access owns the Grand-H�tel du Cap-Ferrat on the C�te d’Azur, while in Buenos Aires it has the Faena Hotel + Universe, an award-winning hotel and luxury apartment complex.

Access Industries, which is headquartered in New York, and has offices in Moscow and London, was founded in 1986 by Mr Blavatnik as his privately-owned industrial group. It includes Warner Music Group among the assets it owns.

Other interests include UC Rusal, the world’s largest vertically-integrated aluminium producer, and other investment areas are natural resources, chemicals, media, and telecommunications.

Mr Blavatnik is ranked by Forbes as the world’s 39th richest person, with an estimated fortune of$18.7 billion. In the Sunday Times Rich List 2013, he was listed as the second richest person in the UK.

The Ocean Club was opened in 1962 as a 52-room hotel by Huntington Hartford II, heir to the Great Atlantic and Pacific Tea Company fortune. Some $10 million was invested in the project.

The Ocean Club was then sold to Kerzner International in 1994, and renamed One&Only Ocean Club in 2002 under the latter’s rebranding exercise.

The property has 105 units, featuring luxury suites and villas, with guests served by personal butlers. It sits on a 36-acre beachfront site, with amenities including Jean-Georges Vongertichten’s Dune Restaurant, two outdoor pools, the One&Only Spa, fitness centre, six tennis courts and two meeting space venues, and several outdoor event venues.

Access will retain the current One&Only management team, chiefly Mark DeCocinis, president and chief operating officer of One&Only, and John Conway, general manager, One&Only Ocean Club.

Kerzner International’s chief executive, Alan Leibman, said in a statement: “Our long-term commitment to the Bahamas continues. We are extremely excited to begin working with Access at One&Only Ocean Club.

“They are a world-class organisation with a shared vision for the continued excellence of the property, ensuring that the resort remains positioned as the ultimate ultra-luxury guest experience in the region.”