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Intrawest lenders postpone auction, according to report

Principals of Fortress, Nippon Cable were in Whistler earlier this week

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Intrawest may duck an auction in the middle of the Olympics as lenders owed money by parent company Fortress Investments Group have reportedly postponed their scheduled Feb. 19 sale.

A Bloomberg report today stated that lenders to the troubled ski company have agreed to delay their public auction one week, to Feb. 26.

An accepted offer at the auction would give the buyer a major stake in Intrawest Holdings S.à.r.l., a company subsidiary that includes Whistler Blackcomb among its eight resorts.

Intrawest declined comment on the report and instead offered a Jan. 20 statement that confirmed, "Fortress Investment Group continues to own and control Intrawest and all of its properties."

James Brander, a Professor of International Trade at UBC's Sauder School of Business, said postponement makes perfect sense and it might have a lot to do with the weather.

"With good weather at the Olympics it's great publicity," he said. "Things didn't start out too well.

"The creditors, of course, are looking for potential buyers, people who bid at auction on the properties. Why give up a week of great, free advertising?"

The Bloomberg report came on the heels of another in the Globe and Mail that said Vail Resorts Inc., which owns Vail, Beaver Creek, Breckinridge and Keystone in Colorado, is interested in buying Whistler Blackcomb and perhaps other Intrawest resorts.

The report does not name any sources but says that Vail Resorts has a standing offer for Whistler Blackcomb. However, Vail Resorts is just one of a number of bidders who may be interested in Intrawest's top resort.

Fortress, the Globe and Mail says, has rejected the pitches and wants to put together a restructuring plan that allows them to maintain ownership in the ski company.

The Globe and Mail also reported that Nippon Cable, which owns 23 per cent of Whistler Blackcomb, is interested in doubling its stake in the resort. The principals of Nippon Cable and Fortress Investment Group were in Whistler earlier this week.

Both reports come just after Daniel Mudd, CEO of Intrawest, admitted in an interview on CNBC's "Squawk Box" that talks have been difficult with the company's creditors.

"We've been having discussions, they're tough discussions," he said on CNBC. "Money's at stake, a big mountain's at stake in the papers and all that, but I think people are working pretty constructively. No one wants to see any damage done to the Olympics in the process, they're defending their interests."

Fortress bought Intrawest in 2006 at a cost of $3.1 billion. The investment company put up $1.375 million of its own money and took on $1.5 million in debt to various lenders including the Deutsche Bank, Bear Stearns (now JP Morgan) and the now-bankrupt Lehman Brothers.

Fortress bought the company at the height of the market and hoped that values and real estate sales would increase and help them pay back their debt. Fortress has now reportedly missed deadlines for a payment of $524 million and creditors are saying they will put their equity interest in Intrawest up for auction at a time when Whistler Blackcomb is on TV for the whole world to see.

Intrawest, meanwhile, has sold off three properties since the auction was announced. It sold the Panorama resort to a consortium of local homeowners in the Kootenays; the Village at Squaw Valley to Squaw Valley USA, which runs the California ski resort; and Sandestin Golf and Beach Resort to the Becnel family of Destin, Florida.

Intrawest sold Colorado's Copper Mountain Resort to the Utah-based Powdr Corporation last fall. The company also sold its interest in French ski resorts.

 

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