Wednesday, August 11, 2010

Sea Island Company Reaches Agreement to Sell Substantially All Assets to Limited Partnership Formed by Investment Funds Managed by Oaktree Capital Management, L.P. and Avenue Capital Group

-(BUSINESS WIRE)--Sea Island Company, a private resort and real estate development company, today announced that it has reached an agreement to sell substantially all of its assets to Sea Island Acquisition LP (“SIA”), a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P. and Avenue Capital Group. The sale agreement follows a robust process – begun late last year – in which Sea Island Company reviewed all of its strategic alternatives and determined that this agreement is the best possible outcome for the Company and its stakeholders.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start”

Under the terms of the agreement, the Company’s businesses will remain intact and retain their core values and culture. After the sale, the businesses will continue under the leadership of Bill Jones III, Chairman and Chief Executive Officer, and David Bansmer, President and Chief Operating Officer.

To facilitate the sale, Sea Island Company, Sea Island Coastal Properties, LLC and their subsidiaries today filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The Chapter 11 cases and sale enjoy the support of all of the Company’s secured lenders and are expected to be completed by year-end. In the interim, the Company has secured a debtor-in-possession (DIP) loan from certain of its secured bank lenders, providing access to additional liquidity should it be required during this period.

The action, filed in the Southern District of Georgia in Brunswick, allows the Company’s businesses to continue normal operations. All of Sea Island Company's operations, including The Lodge, The Cloister, The Cloister Spa and Fitness Center, The Sea Island Club, the Ocean Forest Golf Club, The Sea Island Beach Club, as well as the golf facilities, are open and business will continue without any disruptions to the superior service provided to members and guests. All reservations will be honored and guests will enjoy all of the facilities and experiences they booked at the time of their reservation.

In conjunction with its Chapter 11 filing, Sea Island Company today filed a Plan providing for the sale of substantially all of its assets free of its approximately $600 million of existing secured debt. SIA will own and operate the resort and golf courses without any interruption in services. All obligations owed by Sea Island Company to its trade vendors will be assumed by SIA. All existing employees of Sea Island Company will be offered employment by SIA. All club members will be offered the opportunity to continue to enjoy the same benefits and services at their respective clubs and receive full credit for their deposits paid.

The Board of Directors of Sea Island Company has approved the Asset Purchase Agreement, which is subject to a court-supervised auction process. The agreement was filed with the Court today, along with the DIP financing commitment and a variety of “First Day” motions that will allow the Company to continue to conduct its business as usual.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start,” stated Bill Jones III, Chairman and Chief Executive Officer of Sea Island Company. “Our commitments to our members, employees, guests and community were carefully considered throughout our review of strategic alternatives and we believe this is the best outcome. The purchasers have seen first-hand the value of what we have built – the finest collection of resort assets in the world with the highest accolades and best service. The additional financial strength gained through the transaction provides an ideal foundation for our future.”

Sea Island Company President and Chief Operating Officer David Bansmer added, “Today’s actions are the culmination of a comprehensive process initiated by Sea Island Company’s management and Board of Directors to put our financial challenges definitively in the past and secure a more certain future for our businesses. After completing the Chapter 11 process and the related asset purchase agreement, our businesses will be financially strong – with the same superior service and southern hospitality.”

Sea Island Company's financial advisors are FTI Consulting and Goldman Sachs & Co., and its legal advisor is King & Spalding LLP.

Information about the proposed sale and Sea Island Company's Chapter 11 proceedings is available on the Company's website at www.ourfuture.seaisland.com. Information about the claims process and court filings can be accessed at www.epiqsystems.com. Vendor inquiries can be directed to 1- 888-886-6162 or vendors@seaislandnews.com.

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