Intrawest denies reports of refinancing deal

An official with the parent company for Whistler Blackcomb (WB) this week denied numerous reports that a deal had been reached that would see Fortress Investment Group LLC retain control of Vancouver-based resort company Intrawest, saying talks with lenders were ongoing.

Bloomberg News and The Wall Street Journal this week were among those reporting that Fortress and Intrawest officials had reached agreement with lenders, including Lehman Brothers LLC and Davidson Kempner LLC, on debt restructuring.

After a missed $524 million debt repayment dating to last October, lenders had planned to auction off Intrawest's assets on Feb. 19, but that date was pushed back twice during the Olympic Games as talks continued. The Canadian Press last week reported that the new auction date was to be Monday (March 1), the day after the Games ended.

Under terms of the deal reported in numerous media outlets, Fortress would put another $150 million into the company and divide its $1.2 billion debt into two parts: one of $800 million, on which it would pay 10 per cent interest; and the other of $400, on which it might pay as much as 17 per cent, Canwest News reported.

The $1.2 billion package would extend debt maturities by as much as four years and charge higher interest rates than for the company's existing debt, reported the Canadian Press, citing an unnamed source.

However, Ian Galbraith, Intrawest director of corporate communications, on Tuesday (March 2) told The Question in an email, “Discussions with Intrawest's lenders are (continuing) regarding refinancing and the company continues to operate business as usual at all of its resort properties.”

Fortress, a New York-based hedge fund firm, purchased Intrawest in 2006 for $2.8 billion, borrowing $1.4 billion to do so. The firm, which was heavily invested in mortgage-backed securities, ran into trouble when the mortgage crunch hit in late 2008 and in recent months has been selling off Intrawest resort properties as part of its effort to stave off foreclosure on Intrawest's debt.

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