The parent company of Intrawest, the operator of ski resorts Copper Mountain, Winter Park and Steamboat Springs, is facing financial difficulty and looking to refinance more than $1 billion in debt.
Fortress Investment Group, which owns controlling interest in Intrawest, is putting up $100 million in additional capital to maintain its value in Intrawest, according to a recent report in the Financial Times. Vancouver, British Columbia-based Intrawest has $1.68 billion in debt due today.
Calls to a managing director at Fortress were not returned Wednesday. Intrawest officials wouldn’t comment on the debt situation.
“It’s business as usual,” Intrawest spokesman Ian Galbraith said. “(The debt issue has) no impact on our day-to- day business.”
But a decline in ski-pass sales and resort bookings during a looming recession in the U.S. and abroad might make it difficult for Fortress to refinance Intrawest debt. Intrawest, which is privately held, also operates Whistler Blackcomb, one of the main ski venues for the 2010 Winter Olympic Games in Canada.
In Colorado, lodging reservations for ski-resort communities were down 8.9 percent in September, at a time when business is generally booming. Copper, Winter Park and Steamboat are among the state’s biggest ski areas, serving millions of skiers.
Fortress, based in New York, is “working with one holdout” to complete a refinancing deal, according to comments made to the British newspaper Globe and Mail by Jefferries & Co. analyst Daniel Fannon.
“The impact of the credit markets, and the lack of liquidity or interest in doing any type of transactions, is really making this deal much harder,” Fannon told the paper.
Fortress acquired Intrawest in 2006 using mostly debt, at an interest rate of about 6.4 percent.
Intrawest’s loans are trading at about 70 cents on the dollar in the open market, with its yield rising to nearly 9 percent. That could increase financing costs from $110 million to $150 million.
In August, Citigroup analyst Prashant A. Bhatia downgraded Fortress to “sell,” stating a deterioration in private-equity performance, a dividend cut and limits on capital.
Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com
