Wednesday, Jun 06, 2012

DUBAI (Zawya Dow Jones)--Pearl Valley, a South African golf development owned by Dubai investment firm Istithmar, filed for bankruptcy protection in May to allow it to restructure, the latest example of an investment made in the boom years by the emirate turning sour because of the global financial crisis.

Istithmar in recent months has been active dealing with some of its investments that were hurt by the crisis. High-end fashion retailer Barneys New York last month reached a restructuring deal that reduces its debt to $50 million from $590 million.

And in April, resort operator Kerzner International Holdings completed a restructuring that transferred its massive Atlantis resort in the Bahamas to its creditors and sold its half interest in the Atlantis in Dubai to partner Istithmar.

Leisurecorp, a division of Istithmar, acquired the 170-hectare South African golf course development in 2007 for an undisclosed sum. A year earlier, Istithmar had invested $1 billion in the V&A Waterfront in Cape Town, a holding it sold in 2011.

Pearl Valley in a statement said it started "a business rescue strategy" as it needs to restructure amid the difficult global economic environment. It also said shareholders have tried to improve the performance of the business and funded operational shortfalls in the last few years. A spokesman declined to comment on how much debt was being restructured.

"Like many businesses in South Africa, Pearl Valley has faced challenging trading conditions due to recessionary pressures within both the local and international economies," according to a statement. It added a business rescue practitioner has been appointed.

"The owners believe that if a business rescue and reorganization package can be put in place, the future prospects for the estate remain encouraging, underpinned by an improving economy over the longer term," Pearl Valley said.

The Pearl Valley development includes a golf course designed by Jack Nicklaus and hosts three South African championships. The developer also holds rights to build another golf course, 1000 residential units and a hotel.

-By Nicolas Parasie, Dow Jones Newswires, +9714 446 1681, nicolas.parasie@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

06-06-12 0637GMT