DUBAI: Dubai World is close to selling its 50 percent stake in Miami Beach’s landmark Fontainebleau hotel to South Florida developer Turnberry Ltd, three sources aware of the matter said.
The sale will mark an acceleration of asset sales by Dubai World, which needs the proceeds to repay debt. The state entity, which restructured $25bn of debt in 2011, has already made one major asset disposal this year — the sale of UK logistics warehouse developer Gazeley in June.
The Fontainebleau hotel in Miami Beach in Florida became famous in the 1960s as a playground for stars such as Frank Sinatra, Elvis Presley and Jerry Lewis.
The sale to Turnberry is expected to be signed in a few weeks, one source aware of the talks said. They did not disclose a value for the transaction.
A Dubai World spokesman declined to comment on the sale. Dubai World had paid $375m in 2008 for a 50 percent stake in Fontainebleau Miami Beach. The resort, which borrowed more than $620m to fund a restoration programme before it reopened in November 2008, had to restructure the loan in 2010. Dubai World offered $100m of new equity to lenders as part of a debt restructuring plan.
Turnberry is owned by South Florida’s Soffer family. Jeffrey Soffer bought the 1,504-room Fontainebleau hotel in 2005 and the Dubai firm only came on board in 2008.