Winning control of the complex required KL Holding to first prevail at an auction held last month to purchase the assets of Playa Blanca, the former owners of La Cabana Villas Timeshare Resort and the Royal Cabana Casino. The $50.3 million bid then led to the notes being issued to pay for acquisition, renovation and marketing of the complex. KL ultimately hopes to sell 15,000 timeshare units as a result of upgrades to the properties.

La Cabana includes a 362-room timeshare and hotel consisting of two five-story buildings and a pair of four-story buildings, as well as a shuttered 48,000-sf casino and a restaurant currently operating as a temporary gaming center. The latter portion will soon revert to restaurant space, while the remainder will be restored to create a state-of-the-art gaming, entertainment and showroom facility. The value-add strategy, which envisions the resort becoming a regional leader for casino action, will include an overhaul of the condominiums. According to KL, the units will be recast in a "Caribbean contemporary" design and will have American-style amenities upon completion.

The first of the so-called ABC islands off the Venezuelan coast, Aruba has emerged as a leading tourist destination during the past decade, and the timeshare option has grown in popularity. Besides the island's popularity itself, the buyers note that Eagle Beach has received a consistent ranking as one of the top 10 beaches in the world.

La Cabana Villas also garners international cache, and has been a popular destination for US tourists, but company officials acknowledge the need for changes to compete with other resorts in the country. In the past two years, more than a dozen high-profile resorts on the island have announced renovation or expansion programs, plans backed by such operators as Holiday Inn, Hyatt Regency Marriott and Wyndham. The total amount being invested approaches $200 million. Aruba's government, meanwhile, has pledged more than $230 million to modernize its airport and other infrastructure on the island, which is about 75 square miles in area.