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Sunterra Corp. Buys Out Resort Partner

KAUAI, HI-The publicly traded vacation timeshare company from Las Vegas pays $27 million to buy out its partner in the oceanfront Embassy Vacation Resort Poipu Point.

By Brian K. Miller | Updated on July 17, 2005

KAUAI, HI-Sunterra Corp. is about to be the sole owner of the 219-unit oceanfront Embassy Vacation Resort Poipu Point. The publicly traded vacation timeshare company from Las Vegas has agreed to acquire the remaining 69.57% partnership interest it does not presently own in Poipu Resort Partners LP, the owner and operator of the resort.The purchase price is $27 million, which the company plans to finance with debt. According to the agreement, Sunterra will acquire approximately 1,400 week-equivalents of unsold vacation interests with an estimated retail value in excess of $30 million. Additionally, the company will acquire approximately $22 million of performing mortgage receivables. Embassy Vacation Resort Poipu Point sits on 22 acres overlooking Keoneloa Bay, located in Koloa. On-site amenities include a lagoon-style swimming pool with its own sandy beach, whirlpool spas, complete fitness center, tranquil garden, a poolside bar and grill, and a steam room and sauna. Next door to the resort is the Poipu Bay Resort Golf Course.Sunterra acquired its initial minority interest in the resort last summer. Company president Nick Benson says the resort is “one of the most popular Club Sunterra destinations” and carries the highest rating designations from each of the third party exchange companies. The transaction is expected to be accretive by $0.03 and $0.05 per diluted share in fiscal 2006 and 2007, respectively. Once stabilized, Sunterra expects it will add about $0.065 per diluted share on an ongoing basis.

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