The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister yesterday confirmed that Access Industries, the conglomerate controlled by Ukrainian-born billionaire Len Blavatnik, had received government approval to acquire Paradise Island’s One & Only Ocean Club.

Perry Christie, unveiling the Government’s 20145-2015 Budget, expressed hope that the Access Industries acquisition would boost the One & Only Ocean Club’s position as the Bahamas’ “premier ultra luxury resort”.

While providing no specifics, Mr Christie indicated that Access Industries would invest in “upgrading and expanding” the Paradise Island property, and he expressed hope that Mr Blavatnik’s extensive - and diverse - business holdings might yield further economic possibilities for the Bahamas.

“My Government has been engaged in fruitful discussions with Brookfield Real Estate Financial Partners and Access Industries on the purchase, upgrading and expansion of the One and Only Ocean Club and vacant land on Paradise Island,” Mr Christie told the House of Assembly yesterday.

“Government has given its approval for Access Industries to acquire this valuable asset....... 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.”

Tribune Business exclusively identified Mr Blavatnik and Access Industries as the One & Only Ocean Club purchasers in an article late last month.

And this newspaper was also the first media outlet to reveal that the resort’s current owner, Brookfield Asset Management, was mulling the One & Only Ocean Club’s sale and entertaining buyers in a report on March 17.

It is unclear whether the One & Only Ocean Club purchase has been concluded, as the necessary government approvals represent just one part of the process.

Tribune Business was told last month that the sales negotiations appeared to have hit “a snag” after progressing well up until that point, but the fact the Government has given its consent for the deal indicates that it is back on

A New York-based spokesperson for Access Industries and Mr Blavatnik did not return Tribune Business’s call seeking comment up until press time yesterday. A Brookfield spokesman declined to comment.

Sources close to the purchase price previously told Tribune Business that a sales ranging from $85 million to $130 million was being discussed for the One & Only Ocean Club.

Brookfield is understood to be in no rush, and not under any pressure, to exit the Paradise Island resort assets it acquired as part of the 2012 Kerzner International debt restructuring.

That saw it take over Atlantis and the One & Only Ocean Club in return for ‘forgiving’ the $175 million owed to it by Kerzner International, and Brookfield’s position is thought to be that it will only sell ‘if the price is right’ and the buyer meets its valuation.

It is unclear, though, whether Kerzner International’s One & Only brand would be retained as the operating/management partner for the Ocean Club. The former owner secured a 15-year management agreement with Brookfield as part of the early 2012 debt-for-equity swap restructuring.

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.

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.

When it comes to hotel investments, as revealed by this newspaper previously, Access Industries and Mr Blavatnik work closely with Argentine developer, Alan Faena, founder and president of the Faena Group.

The have worked on several major resort/real estate developments together over the past decade, including the ‘Faena District’ neighbourhood in Buenos Aires, the Argentine capital.

The duo are also partners for the Faena District Miami Beach, a multi-million development for which construction started last year in south Florida.

If the Access Industries deal closes, it will mean the One & Only Ocean Club has effectively returned to its roots, reverting back from corporate to ‘individual’ ownership.

It 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.

Mr Christie, meanwhile, confirmed that Brookfield was working to refinance the $2.3 billion debt it took over from Kerzner International, along with the responsibility to repay the creditors.

Brookfield is seeking to complete that refinancing by end-June, and the One & Only Ocean Club deal may form an important part of the jigsaw.

Mr Christie said Brookfield was “aggressively pursuing plans for refinancing, refurbishment, and adding other features” to Atlantis, “which will further enhance its premier position in the marketplace, all of which will be implemented during this current budget cycle.

“These initiatives will not only strengthen the position of the property, but also positively impact job creation both at the resort and within the local economy.”