KKR’s Apple Leisure Said to Hire Advisers, Weigh Capital Raise

(Bloomberg) -- Apple Leisure Group has hired advisers as it contemplates raising new capital after being battered by the Covid-19 pandemic, according to people with knowledge of the matter.

The travel and hospitality company, as well as owners KKR & Co. and KSL Capital Partners LLC, have hired financial and legal advisers, said some of the people, who requested anonymity because the matter is private. The company is not currently weighing restructuring or bankruptcy as an option, some of the people said.

Apple Leisure has a $950 million first-lien loan due in 2024 that last traded at about 67 cents on the dollar, according to data compiled by Bloomberg. It fully drew down its $175 million revolving credit facility earlier this year, a person with knowledge of the matter said.

Representatives for Apple Leisure and KKR declined to comment and a spokeswoman for KSL didn’t immediately have a comment.

Apple Leisure Group focuses on trips to regions including Mexico and the Caribbean. It specializes in all-inclusive resorts, which sell lodging, food and other services for a single price. The model, once viewed primarily as a budget way to travel, was having a moment before the coronavirus, with Marriott International Inc. and Hilton Worldwide Holdings Inc. embracing the concept.

Now the pandemic has hammered the hotel industry, forcing lodging companies to shutter properties and lay-off hundreds of thousands of workers. Industry analysts expect a protracted recovery that starts with leisure travelers driving to regional destinations, a nascent trend that is unlikely to help Apple’s Caribbean resorts.

KKR and KSL agreed to acquire the company from Bain Capital in December 2016.

©2020 Bloomberg L.P.

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