Intrawest pays off creditors, gets new loan 

Nippon Cable reportedly still interested in increasing its stake in Whistler Blackcomb

Intrawest's financial problems are over... for now.

The parent company of Whistler Blackcomb announced Tuesday that it has officially paid off its lenders and secured a new loan that will mature in 2014. Terms of the loan were not disclosed.

The news ends months of speculation about Intrawest's future after it was revealed the company was late on a $524 million payment to creditors. Rumours followed that creditors including Lehman Brothers, Davidson Kempner, Bear Stearns and Deutsche Bank would hold an auction for Intrawest's assets during the Olympics. That threat never materialized.

Intrawest sold off a number of assets in the last quarter of 2009 and early 2010, including Copper Mountain, Panorama Mountain Resort, the Village at Squaw Valley and Sandestin Golf and Beach Resort in Florida.

Company spokesman Ian Galbraith said it would offer no more information beyond the news release it put out Tuesday and would not entertain requests for interviews with the press.

James Brander, a professor of international trade at UBC's Sauder School of Business, called it good news that Intrawest has paid off its loans and come up with a new one.

"With conditions picking up and the real estate market really picking up and the recession fading away, it's not a shock that they could get new financing," he said.

The issues around Intrawest's debt began with the purchase of the company by Fortress Investment Group in 2006. The private equity-hedge fund put up $1.375 billion of its own capital to buy the company and took on $1.5 billion of debt to the aforementioned creditors, a purchase totaling about $2.8 billion.

Fortress has since struggled to repay its debt and found itself in constant talks with creditors to avoid losing the company in an auction. Financial experts speculated that Intrawest could file for Chapter 11 bankruptcy protection and avoid losing its assets but that, too, never materialized.

Brander went on to say that four years could be enough time for the company to recover enough revenues to satisfy creditors.

"2014, that's not exactly long term but it's not exactly short term either," he said. "They do have time to get through this current business cycle. Assuming things go as expected in the business cycle, they should be looking pretty reasonable four years from now. That's certainly a reasonable length of time to let them... recover their revenue stream."

Though a key asset for Intrawest, Whistler Blackcomb is actually 23 per cent owned by Japanese company Nippon Cable.

Executives with Nippon and Fortress went skiing together in Whistler during the Olympics and a source told Pique that the former is interested in buying a larger stake in Whistler Blackcomb. The source also said Intrawest, whose holdings include Mont Tremblant in Quebec, Steamboat in Colorado, Vermont's Stratton Mountain, Blue Mountain in Ontario, Snowshoe in West Virginia and a management contract for Winter Park, Colorado, may yet be broken up into smaller pieces to be sold off. Nippon may be interested in buying some of the pieces that result.




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