A public notice of foreclosure was posted yesterday by Intrawest’s lenders, stating the auction to sell Intrawest’s assests will be held on February 19th. Whether this will proceed according to the lender’s notice, will only be told in the coming weeks. Intrawest is the current owner of Steamboat Springs Ski Resort.
The Lehman Brothers along with Kempner Capital Management are Intrawest’s primary creditors. After Intrawest missed the latest payment of $524 million, on a $1.4 billion loan, the lenders posted the threat of auction. Intrawest’s owner, Fortress Investment Group, stated yesterday that they continue to own and control Intrawest and all of its properties’ at this time. ‘Intrawest spokesman Ian Galbraith said no company assets have been seized, and it’s business as usual for the Games. Galbraith called the notice of auction…a standard practice by lenders during refinancing discussions.’
The New York Post reports that ‘by forcing Intrawest into bankruptcy, Lehman and other creditors could raise several billion dollars repossessing Intrawest and selling off its various resorts.’Another possible scenario is Galbraith’s explanation, that the lenders are using the Olympics as a means of grabbing more attention to the situation, increasing pressure on Intrawest for the most recent missed payment.
In the short term however, if there is a declaration of bankruptcy, Dan Doyle, the Vancouver organizing committee’s executive vice president of construction, is not worried. ‘Bankruptcy doesn’t happen overnight.’It’s a long process, it’s a process that takes months. Given all of that, we’re very confident that the Games will go on at those two venues in Whistler, and they’ll go on with the co-operation of the people that are running the mountain.’
What does this mean for Steamboat? Depending on how this situation plays out, could result in different scenarios. The headline of the New York Times, tells a fair bit though, ‘Lenders Threaten to Auction Whistler Ski Resort.’ Nothing is yet set in stone.
The 2 solutions I see as most probable are that either Intrawest will re-finance with Fortress’s help, or a new owner with cash will get the resorts for substantially less. This would result in a much better cash flow and the ability to invest in improved facilities.
Will keep you posted on the change of status of Intrawest, and the effects felt in Steamboat.
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[...] An article recently released in Mountain Town News describes the current status and opinions regarding the future of Intrawest. For a background on the bankruptcy and the history of Intrawest, check out ‘Intrawest Foreclosure, Details and Meaning.’ [...]