VANCOUVER — Just as the clock ticks down to the opening of the 2010 Winter Olympics in Vancouver and Whistler, news emerged last Wednesday, Jan. 20, that Vancouver-based Intrawest, which owns the Whistler Blackcomb Resort, may be forced into foreclosure.
The New York Post reported that Intrawest had missed a large debt payment to its main lender, Fortress Investment Group, which acquired the company in 2006 for US$2.8 billion in cash and debt. The Post also stated the tension between the groups was so high there was the potential of Fortress barring the games from Whistler. The company’s lenders, which include Lehman Brothers, also posted public notices in The Wall Street Journal, The New York Times and The Globe and Mail that same day, stating that lenders had seized the assets of Intrawest ULC, including the Whistler resort, and an auction to sell the assets would be held on Feb. 19, right in the midst of the Olympics, which only added to the firestorm of whether or not the Games would be hosted on the property. To meet the loan payments on the deal, Intrawest has already sold off assets, including its resort at Copper Mountain, Colo., and two resorts in France.
But soon after those reports surfaced, Intrawest sent out its own press release stating: “There have been inaccurate and misleading media reports surrounding Intrawest today. Fortress Investment Group continues to own and control Intrawest and all of its properties. Serious discussions with Intrawest’s lenders are ongoing regarding refinancing and the Company continues to operate ‘business as usual’ at all of its resort properties. Intrawest is looking forward to the success of the 2010 Olympic and Paralympic Winter Games.”
On Thursday, Intrawest spokesman Ian Galbraith then stressed that reports about its Whistler venue, alongside its other resorts, being seized by its lenders are untrue.
According to a CP story, Galbraith noted that, while the downturn in the economy and the subsequent softening of the tourism sector had a significant impact on the business, Intrawest has been generating strong cash flow from its resorts. Of the loan it’s currently struggling to repay, Galbraith added, “It’s been on the books for a while; it’s not something that’s happened because of the recession. It’s strictly a refinancing issue.” Intrawest is hoping to raise the money to settle the dispute before the Feb. 19 auction date. “They’ve put that forward as their tactic in this renegotiating process — that notice they published with the auction date — and it’s not that we don’t ever see the [negotiating] table…we’re still in active discussions with them.” The CP story also noted that the lenders delivered a notice to Intrawest on Jan. 8 to begin the foreclosure process on the equity of the company after it defaulted on its debt that was declared due on Dec. 24.