Fortress reaches debt deal
Parent of Intrawest expected to keep full stake in company
February 27, 2010
Fortress Investment Group has reached a deal to restructure the debt of Intrawest, The Wall Street Journal reported Friday.
The newspaper reported that the agreement allows Fortress, a New York-based private-equity and hedge fund firm, to keep its full stake in Intrawest. Intrawest is the parent company of Steamboat Ski and Resort Corp. According to the Journal article, "The New York private-equity firm will inject an additional $150 million of equity into the business to pay down debt. A new $1.2 billion loan package will extend debt maturities by as long as four years but charge a higher rate of interest than existing debt."
The deal isn't official, the newspaper reported.
Earlier Friday, reports in The Denver Post and elsewhere said Fortress won a second extension from creditors of a foreclosure auction that had been scheduled for that day.
Intrawest owns Steamboat and operates Winter Park ski area for Denver. The Vancouver-based company also owns Whistler Blackcomb in British Columbia, the site of many 2010 Winter Olympic Games events.
Earlier this month, Intrawest sold its interests in Sandestin Golf and Beach Resort in Florida. The purchaser was identified as the Becnel family of Destin, Fla. The company has sold several other resort holdings this year, including Panaroma Mountain Resort in western British Columbia and The Village at Squaw Valley, Calif.
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Intrawest also sold Copper Mountain ski resort to Powdr Corp., of Utah, late last year and sold two of its French resorts.
According to a report from Bloomberg, Lehman Brothers Holdings is among creditors seeking control of Intrawest since it missed a final payment on a $1.4 billion loan due Dec. 23. The lenders' administrative agent originally set Feb. 19 for the auction before granting a one-week extension.
Fortress reported its 2009 earnings this week, as well. The company's net loss was $909 million, compared with $1.2 billion in 2008. The loss attributable to shareholders was $255 million, or $2.08 per share.
For the fourth quarter that ended Dec. 31, Fortress' net loss was $261 million, compared with a loss of $426 million for the fourth quarter in 2008. The loss attributable to shareholders was $84 million, or 58 cents per share.
On Wall Street, shares of Fortress Investment Group closed at $4.03 on Friday, down 1 cent, or a fourth of a percent.