Dubai: A unit of Dubai World has sold its Atlantis resort, located on Dubai’s Palm Jumeirah, in an asset shuffle between state entities to help the group meet debt repayments after a $25 billion restructuring in 2011.
Investment Corp of Dubai (ICD), a holding company which controls some of the emirate’s top firms, has bought the resort from the unit, Istithmar World, for an undisclosed sum, ICD said on Thursday.
ICD said buying the landmark hotel complex that is characterised by a giant Arabic-style arch would help the emirate’s economic development.
“Our acquisition of an asset that is a major contributor to the domestic tourist industry is in line with our overall strategy to support long-term sustainable growth for Dubai,” Khalifa Al Daboos, deputy chief executive officer of ICD, said in the statement. A spokesman for Istithmar in Dubai declined to comment.
Atlantis was set up in 2008 as a joint venture between Istithmar World and Kerzner International. In April 2012, Istithmar acquired Kerzner’s 50 per cent stake in the property for $250 million.
The sale adds to a series of disposals by Dubai World, which had promised to sell non-core assets under the debt-restructuring plan in the aftermath of the global financial crisis.
“This strategy is quite creative in that it allows Dubai to keep its prized assets under its government umbrella, while at the same time freeing up liquidity to repay upcoming Dubai Inc restructured loans,” said Gus Chehayeb, director of credit research at investment firm Exotix in Dubai.
Dubai World needs to repay $4.4 billion (Dh16.18 billion) in May 2015 under its restructuring terms but its plan to sell assets to meet the payment was hit by unfavourable selling conditions and the fall in valuations since the global financial crisis.
Dubai World’s restructuring plan envisaged that it would raise $1.3-$2.3 billion between 2010 and 2012, and a further $3.9-$5.3 billion in 2013-2015 through sales of holdings such as P&O Ferries and MGM Resorts International.
