Officials at American Skiing Co. say they've succeeded in taking $80.4 million in real estate debt and accrued interest off the company books through a complex transfer of land and debt at one of its resorts in New England.
ASC has spun off a combination of company debt and development land at Killington, Vt., into a new company, completing the restructuring of its real estate loans in the process.
ASC is the parent company of the Steamboat Ski Area.
SP Land Company, a new entity, has been formed to develop slopeside real estate and the base-area village at the Killington Ski Resort. In addition to acquiring development property, SP Land will take on significant debt.
In its recent earnings report, ASC said the creation of SP Land is a part of its restructuring of real estate loans from Fleet National Bank, Ski Partners LLC and Oak Hill Capital Partners (its majority shareholder), to cure loan defaults. ASC's chief financial officer has said the restructuring brings all of the debt of ASC and its subsidiaries in compliance with the terms of the loans.
"We are now solely focused on creating opportunities for the future," CFO Betsy Wallace said.
Ski Partners has had a financial interest in Killington and has been working with ASC at the ski area since 2002, according to a report on the Web page of SKI magazine.
SP Land Company was created by Ski Partners with two ASC subsidiaries, Resort Properties and Killington, Ltd. Ski Partners will control 75 percent of the company and the two ASC subsidiaries combined will have a 25-percent stake.
SKI reported that SP Land acquired 213 acres at the Killington base area. ASC's earnings report indicates $5.4 million in land and cash assets and $55.4 million in real estate loans held by Fleet and Ski Partners were transferred by Resort Properties and Killington into Ski Partners.
In addition, $25 million in debt was contributed by Oak Hill to ASC as paid in capital. Oak Hill will not receive additional consideration or equity in exchange, according to the earnings report.
The final piece of the restructuring of ASC's real estate debt involved the transfer of 236 acres of additional real estate into a company called Cherry Knoll Associates. SP Land and Killington will each own 50 percent of that venture.
Killington officials said they expect SP Land Company to have the resources necessary to undertake a redevelopment of the ski area's base and improve its competitive standing for decades to come.
ASC effectively has accepted a minor role in any future base area development at Steamboat by selling off almost all of its real estate to individual business owners and developers.