Sunterra Paying $94M to Up Stake in Hawaii Resort

MAUI-Publicly held Sunterra Corp. of Las Vegas is paying $94 million to acquire the rest of West Maui Resort Partners LP, owner and operator of the 413-unit Embassy Vacation Resort Ka’anapali here. Sunterra, which presently owns a 23.3% interest in the partnership, says the acquisition of the remaining interests will be largely debt financed.Located on Ka’anapali Beach, the 12-story fractional ownership resort has three towers covered with a central atrium. The property features ocean and mountain views, a two-floor waterfall, and a one-acre free form swimming pool. As part of the purchase price, Sunterra will acquire unsold vacation interests with an estimated retail value in excess of $235 million. Additionally, Sunterra will acquire $45 million of mortgage receivables that is describes as “among the strongest performing pools” it currently services. Sunterra says the transaction will be accretive to net income in 2004. Sunterra is one of the largest vacation ownership companies with 94 affiliated resorts. Company president/CEO Nicholas Benson says the resort is one of Club Sunterra’s highest quality and best performing properties. He adds that Sunterra employees have run the sales and marketing and property management functions for years, so integrating this property will require no significant changes in the team, the processes and routines. The transaction is expected to close late this month or next, at which point Sunterra says it will provide more detailed financial information regarding the acquisition. “We have obtained strong financial backing for this transaction and following the closing, will retain a high level of financial flexibility, says Benson.