KL Holdings Making $65M Bet on Aruba

ARUBA-Plans to create one of the largest casinos in the Caribbean has gotten a $65 million infusion that will be used to revive a bankrupt resort along this island’s famous Eagle Beach. The funding for KL Holding Co.’s vision comes via the issuance of senior secured notes to institutional investors. KL is affiliated with the Gillmann Group, owned by Las Vegas gaming mogul Fred Gillmann, who has been personally involved in securing the Aruba assets.

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.