Following months of financial uncertainty, Resorts of the Canadian Rockies is back in business after creditors and shareholders approved a $120-million rescue package.
The deal will save the company from bankruptcy and all its assets ? which includes eight ski resorts in B.C., Alberta and Quebec ? will be kept intact.
The rescue package will see Calgary financier Murray Edwards and RCR?s former owner Charlie Locke emerge as 50-50 partners. Edwards will control all the properties while Locke will continue to run the operations. Under the plan, RCR will become a new company called Resorts 2001.
Edwards has stakes in a number of oil companies and is a co-owner of the NHL?s Calgary Flames. He is worth an estimated $500 million.
The eccentric Locke started building his ski-resort empire in 1974 after buying into the Lake Louise ski area. Over the last five years, RCR expanded rapidly and has assets worth $160 million.
Secured creditors Bank of Montreal and FleetBoston Financial Corp. are owed $55.6 million and will be paid in full.
Unsecured creditors owed less than $1,500 will also be paid in full, while those owed more than $1,500 will be paid between 20 and 25 cents on the dollar.
The rescue package will provide $75 million in new equity as well as the assumption of mortgages and leases.
The plan, which was approved Aug. 17, puts an end to a rival bid from the owners of Quebec?s Camp Fortune and Alberta?s Sunshine Village ski areas. Sunshine is RCR?s main competition in the Banff area.
Creditors had turned down the consortium after they requested the vote be delayed to prepare a competing offer.
Calgary-based RCR owns high-profile resorts such as Fernie and Lake Louise and its holdings also include golf courses and real estate developments.
The company has been under court protection since last March after the combination of a poor ski season and the withdrawal of a major U.S. lender led to a cash crunch.
According to published reports, RCR was hemorrhaging as much as $1 million a week before the deal was approved.
RCR is North America?s largest privately owned ski-resort operator and sees more than two million annual skier visits. The company also owns Kimberley in B.C.; Nakiska, Fortress and Wintergreen in Alberta; and Mont-Sainte Anne and Stoneham in Quebec.