Steamboat Springs American Skiing Co. is on notice that its trading symbol may be taken off the New York Stock Exchange.
The parent company of the Steamboat Ski Area reported today it had been advised by the NYSE it has fallen below criteria for remaining on the stock exchange.
American Skiing immediately asked that the exchange grant it 18 months to get back in conformance.
The stock price must remain at $1 or above over a 30-day trading period, according to the NYSE criteria. American Skiing's stock, which closed at 48 cents on Monday, hasn't seen $1 since Oct. 22, 2001. That price is more reflective of stocks traded over the counter than it is of NYSE companies.
American Skiing officials said Monday they have begun discussions with the NYSE regarding the company's business plan and added they are committed to conforming to NYSE criteria.
American Skiing is in the midst of a fiscal reorganization but has been unable to consummate the cornerstone of that plan the sale of Steamboat. Based on information about previous ski area sales, the Steamboat deal should gross more than $100 million to help American Skiing get out from under overwhelming debt.
American Skiing signed a nonbinding letter of intent to sell Steamboat to Tim and Diane Mueller, owners of Okemo Mountain, Vt., on Nov. 1, 2001. However, the national recession has caused institutional lenders to become more cautious, and the two parties were not able to achieve their goal of closing the deal by the first of the year.
On Jan. 15, it became evident that another potential buyer had jumped into the negotiations.
That information was revealed in a report by Moody's that resulted from the financial ratings agency downgrading American Skiing's debt rating.
Two investment banking companies, Babcock and Brown of San Francisco, and Goldner, Hawn and Johnson of Minneapolis, had been among the finalists to purchase Steamboat in October 2001.
The New York Stock Exchange has found American Skiing's stock deficient in three criteria used for determining the listing status of the stock. In addition to trading below $1, American Skiing failed to meet the NYSE's standard requiring a total market capitalization of not less than $50 million over a 30-day trading period and stockholders' equity of not less than $50 million.
The term "total market capitalization" is computed by a simple formula multiplying the number of publicly traded shares times the closing price of the stock.
According to a source in the brokerage business, total market capitalization does not include shares of preferred stock like
American Skiing shares controlled by Oak Hill Capital partners. Those shares are in private placement and not actively traded. Oak Hill is among American Skiing's largest creditors and controls a majority of the seats on the company's board of directors as well as a majority of its stock.
The criteria that applies to stockholders' equity could take preferred shares into account. In simple terms, stockholders' equity is derived by comparing the company's real assets to its debt.
New York Stock Exchange rules provide that it may grant up to 18 months from the date of notification for American Skiing to come into conformity with market capitalization and stockholders' equity requirements. The NYSE may also grant up to six months for American Skiing to get its stock price consistently above $1.
American Skiing officials said Monday that if their business plan is accepted by the NYSE, the company will subject itself to quarterly monitoring by the exchange.
"In addition, the company will make the key elements of the plan public as appropriate," the company said in a release. "There can be no assurance that the NYSE will decide to allow the company to remain listed or that the company's actions will prevent the de-listing of its common stock."