The Russians are coming? 

WSJ reports Intrawest approaches Russian billionaire to buy Whistler Blackcomb

Whistler Blackcomb is back in play on the open market, according to anonymous sources speaking to the Wall Street Journal .

The New York-based newspaper reported on Monday that parent company Intrawest is looking to Russian billionaire Vladimir Potanin, an investor behind the ski resort that will host the 2014 Olympic Winter Games in Sochi, as a potential purchaser for its hottest property.

The report comes just months after Intrawest announced it reached a refinancing deal for a debt that was due in December 2009, repaying prior lenders such as Lehman Brothers and Davidson Kempner in full and completing a new loan that's scheduled to mature in 2014.

Intrawest would not comment on the report, saying only "no comment" via an e-mailed response to all of Pique 's questions.

Potanin is the largest shareholder in Norilsk Nickel, one of the world's largest producers of nickel and palladium and a leading producer of platinum and copper. The company also produces minerals such as cobalt, chromium, silver, gold and sulphur.

He has a big hand in the development of the Rosa Khutor resort, a ski area under construction in Russia's Krasnaya Polyana region that will host all alpine events during the 2014 Sochi Games. Once built Rosa Khutor will have 14 lifts. Elevation drop at the resort is 1,745 metres, about 215 metres more than Whistler Mountain.

Sources told Pique that Potanin is an avid skier who vacations in Courchevel, France. He was reportedly a driving force behind Sochi's bid for the 2014 Games and he skied in Whistler during the 2010 Olympics.

The source said that if Potanin were to buy Whistler Blackcomb then he'd be able to take advantage of "all the expertise" needed to get everything done in time for the 2014 Olympics. Russia's Games are just three and a half years away. The Kasnaya Polyana region is largely populated by farmers and herders. Infrastructure, including power and a paved highway, are being brought to the area as Rosa Khutor is developed.

Another source said it's unlikely that Potanin will buy Whistler Blackcomb but did confirm that the property is being shopped around.

Potanin isn't the only prospective buyer of Whistler Blackcomb. Executives with Fortress Investment Group, which owns Intrawest, and Nippon Cable went skiing together during the 2010 Olympics. Nippon Cable has reportedly expressed an interest in increasing its 23 per cent stake in Whistler Blackcomb.

The Journal , meanwhile, reported that Intrawest may turn Whistler Blackcomb into a separate company and file a public offering.

Speculation around Whistler Blackcomb's fate started before the Olympics when creditors filed notice of a public auction in January in a move that looked like they were trying to recover their investment in the company.

Fortress bought Intrawest in August of 2006, at the height of the market. Since the recession began, Intrawest has been hurt by a drop in vacation-home sales and has been one of Fortress's poorest performing investments. In December the company failed to make a $524 million payment to its lenders on a $1.5 billion loan, which led to creditors announcing a public auction. Fortress eventually refinanced the loan and the auction never took  place.

Last summer Intrawest CEO Bill Jensen said that debt reduction was the company's priority. In the last nine months Intrawest has sold off assets including Copper Mountain, Panorama Mountain Resort, Sandestin Golf and Beach Resort, the Village at Squaw Valley and its interest in the French ski resort of Les Arcs.

Meanwhile Fortress has been struggling in the recession, with shares losing over 65 per cent of their value since the Blackstone division of the company went public in 2007. As well, their private investments are also underperforming with small or negative returns on most of their recent funds.

The report does not suggest what the purchase price might be for Whistler Blackcomb, or what other Intrawest assets within Whistler that might be included in a deal - such as accommodation, retail and other holdings.

 

 

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