The show will not go on
So, you got your finances in order, sold some things on Craigslist, had a bake sale, stole the kids’ milk money, and waxed up your skis. All this, to get motivated to buy one Intrawest’s resorts at ‘auction’. Guess what? You can’t, and not just because you didn’t get your reserve price for your old Air Jordan’s on eBay. Why?
“Ski resort operator Intrawest’s owner has reportedly reached an agreement with creditors to restructure its debt and avoid an auction of the company’s properties.”(*1)
Does this shock anyone?
As interesting as the ‘foreclosure’/auction process was, the creditors obviously liked the new deal more.
“A new $1.2-billion loan package will extend debt maturities by as long as four years and will charge a higher rate of interest than existing debt.”(*1)
So, what’s next for Intrawest? After selling off 4 resorts, they are a little leaner, and ready to move forward. But, even with the extended payment period, what makes the creditors think they will get paid? As we outlined in Intrawest spells ‘Trouble’?, Intrawest/Fortress has failed to pay their debt obligations for years, after numerous extensions. They clearly have a trend of not paying down their debt. This is basically just another extension, where they actually owe more money in the end. But, indicated by selling off non-core assets, Fortress is obviously a little more serious about actually paying down their debt at this time. Only time will tell if they can follow through, or will we be talking about the same scenario in 4 years?
Sources:
1. Intrawest makes deal with creditors, Globe and Mail, March 1, 2010.