PARADISE ISLAND, BAHAMAS— Kerzner International reported that it and its local partners, Societe Maroc Emirates Arabs Unis de Developpement (SOMED) and Caisse de Depot et de Gestion (CDG), have entered into an agreement with the Government of the Kingdom of Morocco for the development of a destination resort casino. In addition, Kerzner, SOMED and CDG have entered into an agreement in principle with respect to the ownership, development and management of this resort. The resort site is located near El Jadida, which lies approximately 50 miles southwest of Casablanca. The site includes three miles of beachfront along Moroccos Atlantic coast. The cost of the project is estimated at $230 million and is expected to consist of a 600-room hotel, an 18-hole golf course, convention space, restaurants and a casino, according to Kerzner. As part of its agreement with the government of Morocco, the joint venture has negotiated exclusive rights to conduct gaming operations within a 100-mile radius from the center of Casablanca. Kerzner said it will own 50% of the joint venture, requiring the company to commit up to $47 million. SOMED and CDG will provide the remaining equity requirement. While Kerzner will have the ability to reduce its initial equity interest in the project, it has undertaken to continue to hold at least a 34% equity interest in the project. Debt financing is expected to be raised in the local Moroccan market. Construction of the project will begin in 2005 with completion anticipated by mid-2007, according to Kerzner. Kerzner said it expects to enter into a long-term management and development agreements with SOMED and CDG.
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