Lenders threaten auction of Olympic ski resort

VANCOUVER — Lenders have moved to auction off the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.

Ski runs on Blackcomb mountain can be seen behind Whistler Blackcomb's new Peak to Peak gondola. Whistler Blackcomb ski resort is scheduled to be sold in an auction during the Winter Olympics.

Ski runs on Blackcomb mountain can be seen behind Whistler Blackcomb's new Peak to Peak gondola. Whistler Blackcomb ski resort is scheduled to be sold in an auction during the Winter Olympics.

VANCOUVER — Lenders have moved to auction off the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.

Intrawest said it will be “business as usual,” despite the possibility the high-end B.C. resort could be on the auction block even as Olympic athletes grace its slopes.

And Olympic organizers said they’re confident that the Games will go on.

Dan Doyle, executive vice-president of construction for the organizing committee, known as VANOC, said the venues in Whistler are ready.

“It doesn’t make very good business sense for people to put them out of business at the time of the year when they’re making their most earnings,” Doyle told reporters in Vancouver following the local organizing committee’s final board meeting before the Games.

Doyle said bankruptcy doesn’t happen overnight.

“It’s a long process, it’s a process that takes months. Given all of that, we’re very confident that the Games will go on at those two venues in Whistler, and they’ll go on with the co-operation of the people that are running the mountain,” he said, noting that Games organizers have sought legal advice on the situation.

Whistler Mountain will host the alpine skiing events, while the sister mountain Blackcomb is the site of the sliding centre. Both mountains are in the Intrawest resort.

Nordic events are also taking place in Whistler at a site not owned by Intrawest.

A public notice has been posted in newspapers by the company’s lenders saying that an auction to sell the assets will be held on Feb. 19, right in the midst of the Olympics, which begin Feb. 12.

Vancouver-based Intrawest, which is owned by private equity firm Fortress Investment Group LLC, reportedly missed payments last month that were due on a US$1.4-billion loan.

The group of lenders, which includes Lehman Brothers and Davidson Kempner, hope for a speedy sale of Intrawest in one transaction.

“Each qualified bidder must be a financial institution or other entity that has the financial wherewithal to purchase the membership interests in immediately available funds on the closing date,” the public auction notice said.

The sale includes more than a dozen resort properties including Mont Tremblant in Quebec, Steamboat and Winter Park in Colorado and Squaw Valley in California.

Calls to Intrawest were not returned but the company said in a statement that they are looking forward to the success of the 2010 Olympic and Paralympic Games next month.

“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,” the company said in a statement released Wednesday.

Members of the Vancouver Olympic organizing committee denied a report that they were going to withhold the money they owe Intrawest for use of the mountain.

Intrawest has been struggling with financial problems since it was bought by Fortress in 2006 for US$2.8 billion in cash and debt.

The deal was a leveraged buyout with a $1.7-billion loan which came due in late 2008, around the time when the financial meltdown hit.

Around that time, travellers also began to tighten their budgets and cancel vacation plans, which squeezed the entire industry.

In reaction, many of Intrawest’s resorts significantly slashed their prices to encourage more visitors.

Last summer, chief executive Bill Jensen told a ski industry conference that signs of a recovery wouldn’t likely appear until the 2011-12 season.

Intrawest has sold several assets in order to meet the payments, including a resort at Copper Mountain, Colo., and two resorts in France.

In December, the company said it was in an “active dialogue” with its lenders after rumours began surfacing that the company was about to default.

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