Published: July 6, 2009
Bear Mountain, a luxury hotel and golfing resort in Victoria, Canada, is looking to the sukuk market to raise up to US$380mn to re-finance a loan it took out from HSBC. It would be the first publicly-rated sukuk issued in Canada.
Jonathan Strum, general counsel of Shiraj Capital, the Dubai-based advisory firm which is advising Bear Mountain, says: “The company decided that it was more likely raise sukuk financing than conventional financing, because it has an attractive asset underneath.”
The US$400mn resort was set up and is owned by Len Berry, the former National Hockey League player, and also the owner of the Tampa Bay Lightening NHL team, which he bought last year.
Berry says he got into the golf resort business by accident: “I cut some trees down accidentally on Royal Colwood Golf Course where my home was and the board thought my son and I should be kicked out. I needed somewhere to play golf so my response to them was: good, we will build our own. It was like getting traded from a team. You want to go and kick the team in the ass and do well against them.”
The resort’s construction was financed with the help of a loan from HSBC Canada. Strum says: “HSBC wants to close that loan out, but if Bear Mountain is successful in raising other finance, HSBC will come back in and lend to other parts of the project.”
Not all of the resort is shariah-compliant. The restaurants, for example, serve alcohol. That means “not all of the resort’s assets will be grouped together for the sukuk”, says Strum.
Both Berry and Siraj Capital recently attended the London Sukuk Summit, where they met with Islamic investors and promoted the company.