Tuesday, December 29, 2009

Vancouver 2010 Olympic Winter Games not affected by Intrawest current situation

Intrawest’s current debt negotiations will not have any impact on the upcoming Winter Olympic Games, an Intrawest spokesman emphasized to SAM today. "Our venues are finished, preparations are nearly complete and we look forward to welcoming the world to Vancouver", added Dave Cobb, deputy chief executive officer for the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games, in a statement released last week.
Having missed a $524 million payment Dec. 23 on a $1.4 billion loan, Intrawest is continuing negotiations with its lenders, according to The Globe and Mail. Lenders had reportedly granted Intrawest a 60-day extension on the loan, which had been due Oct. 23. "Intrawest continues to be in active dialogue with our lenders regarding refinancing a term loan", chief executive officer Bill Jensen said in a statement. On December 23, Intrawest CEO Bill Jensen said in a prepared statement, "Intrawest continues to be in active dialogue with our lenders regarding refinancing a term loan. Our core ski operations are off to a very good start this season and it is business as usual for Intrawest. We are continuing to provide our customers and homeowners with the memorable experiences that they have come to expect when they visit our resorts".
"Intrawest is generating strong cash flow from its resorts, is well capitalized, and core ski operations are off to a very good start this season", Jensen said, according to a Bloomberg News report last week.
According to the Bloomberg report, Intrawest in September presented lenders with a plan to reduce its debt. One part of that plan was to sell assets, as Intrawest did last month when it agreed to sell Copper Mountain to Powdr Corp. Bloomberg reported that a person familiar with the debt negotiations said a portion of the proceeds of the sale would be used to pay lenders. While the sale price for Copper has not been publicly disclosed, Bloomberg learned that Intrawest told lenders the price could be as high as $107.4 million.
Fortress Investment Group bought Intrawest in 2006 for $1.8-billion and assumed an additional $950 million in debt as part of the deal, a total that amounted to a 20 percent premium over Intrawest's share price. This past summer, Fortress told its investors that it was marking down the value of the Intrawest investment to 29 cents on the dollar, according to the Globe and Mail.
Fortress, which was trading above $15 a share in early 2008, was at $4.50 recently