Where is Intrawest heading with their money problems? After a two month extension of a loan payment due in late October of 2009, Intrawest missed the extension date on a payment of $524 million.
Intrawest, which operates four Canadian resorts such as Olympic-skiing venue Whistler Blackcomb, as well as six resorts in the United States, defaulted on the $524-million debt payment in late December and has been trying to work out a deal with lenders.
The company is owned by private equity firm Fortress Investment Group LLC, which acquired Intrawest in 2006 for $1.8-billion. Fortress also assumed $950-million in debt in the deal. Fortress paid a 20-per-cent premium over Intrawest’s share price to get its hands on the company, but said in a letter to shareholders in August that it had marked down the value of the investment to 29 cents on the dollar.
Sounds like not a great investment so far for Fortress. What to make of Intrawest is the question for us here in Winter Park, CO. Intrawest has sold Copper Mountain Ski Resort and is in the process of selling its Sandestin, Florida beach resort. Earlier in the year, Intrawest sold two of its resorts in France to holiday company Pierre et Vacances. That price was also not disclosed. Will Intrawest up and walk away from their management agreement with the City of Denver? Very unlikely, but in these crazy financial times for resort developers nothing is beyond belief.
This next year will be a very interesting time to see what happens to Intrawest. They have disbanded the development part of their company, Intrawest Placemaking, and are having a hard time selling the real estate it has already developed. So their revenue income is now mainly from sales of lift tickets, food, beverage, lodging, and equipment. A great snow year with skier visits up and Intrawest may be OK. With a down year I think they may be selling off their parts. That may be the case anyway if they can not come to an agreement with their financiers.
Anywho, Winter Park will be celebrating it’s 70th year of continuous operation this January 23rd here in the Colorado Rocky Mountains. And now would be a great time to visit and buy property at Winter Park Resort.