Intrawest: It’s ‘business as usual’ while financing is sorted out
January 21, 2010
Intrawest’s creditors plan to auction off equity stakes in the company next month, according to notices posted in major newspapers Tuesday.
The move comes after Intrawest’s parent company Fortress Investment Group failed in December to make a $524 million loan payment on a $1.4 billion debt, according to reports by the Globe and Mail, Denver Post, and the Associated Press.
The auction has been scheduled for Feb. 19, smack in the middle of the Winter Olympic Games. The Games are scheduled to begin at the Intrawest-owned Whistler Blackcomb ski area Feb. 12 and will wrap up on Feb. 28.
Despite the published notices, Intrawest insists that negotiations with its creditors regarding the debt are ongoing and that it is hoping to refinance the loan. In a press release Wednesday, Intrawest said the company maintains control of its resorts and will be conducting “business as usual.”
A report in the Globe and Mail Wednesday states that lenders, including the defunct Lehman Brothers and hedge fund Davidson Kempner, notified Fortress of its intent to begin foreclosure proceedings earlier this month.
“No foreclosure has happened,” Intrawest spokesman Ian Galbraith later told the Associated Press, adding the public notices are standard procedure during refinancing discussions.
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Fortress acquired the British Columbia-based company in a $2.8 billion leveraged buyout in 2006.
The purchase included a 50-year agreement between Intrawest and the City of Denver for the operations and development of Winter Park Resort.
Intrawest picked up Steamboat in 2007 for $239 million, according to the Denver Post, and last month, the company sold Copper Mountain to Powdr Corps for an undisclosed amount, signaling the company’s looming financial difficulties.
“We are confident there will be no impact on the operation of the resort,” City of Denver’s chief financial officer Claude Pumilia told the Denver Post. “Intrawest doesn’t own Winter Park. There is no risk whatsoever of the city losing the resort.”
Winter Park Resort President and CEO Gary DeFrange declined comment, and Intrawest spokesman Ian Galbraith did not respond to requests for comment on this story.
– Reid Armstrong can be reached at 970-887-3334 ext. 19610 or firstname.lastname@example.org.