A second Olympic venue may be singing the recession blues as a result of troubles at Fortress Investment Group.
Vancouver-based Intrawest, parent of Whistler-Blackcomb, faces a Thursday deadline for $1.68 billion in debt payments, according to a report in the Financial Times. Fortress bought Intrawest in 2005 for $2.8 billion.
Fortress Credit Corporation (a subsidiary) also holds a $750 million mortgage at the Southeast False Creek Olympic Village, which is more than $60 million over-budget.
Reuters reports:
People familiar with Fortress say there is a low probability Intrawest will file for Chapter 11 bankruptcy protection, the Financial Times said.
The paper quoted a portion of a letter sent to investors on October 3 which said, "We are engaged in constructive discussions with the balance of the lending group."
Fortress was not immediately available for comment.
New York-based Fortress controls Intrawest via a $1.37 billion equity stake. With Intrawest's debt trading at less than 70 cents on the dollar, Fortress has approached potential and existing lenders to discuss a refinancing involving $1.4 billion in senior debt, the Financial Times reported.
It is putting in an additional $100 million of capital to preserve its equity's value, but talks will be tricky since any member of the lending group can veto a deal, the paper said.
Fortress Investment Group is one of the few publicly traded managers of private equity and hedge funds
New York Stock Exchange-listed FIG peaked at $37 a share in 2007 and closed at $5.55 on Friday.
Bob Mackin reports for Vancouver's 24 Hours.
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G West
3 years ago
Interesting
And not surprising that Campbell associate John Evans (Trilogy Properties) got out while the getting was good too.
I believe it went for 35 dollars/share when Fortress bought it with the help of, wait for it, Lehman Brothers, Deutsche Bank and Bear Stearns who provided debt financing.
NicS
3 years ago
Intrawest History Had Many Rumours
When Intrawest Bought Blackcomb Mountain back in 1986, there were many unsubstantiated rumours about what Intrawest was about. One Vancouver contractor voiced the opinion that more than one of their projects would never see the accepted return on investment. Other voices suggested in a BC business magazine that something was amiss? In their first season of over 100 million dollars in construction in 1987 in Whistler, many contractors couldn't understand why their invoices were being paid in less than 30 days, the norm is usually more than 30 days and more often than not 60 plus days. It was suggested by a corporate lawyer that his client wanted all bills paid at that time in a manner that would not raise any hackles nor suspicions, as there already were some. The big question was where did Intrawest's funding come from? It has been rumoured that 80% was from MiddleEast arms dealers, 10% MiddleEast drug dealers and 10% from MiddleEast Oil. So presumably there might have been some laundering going on. In the 90's Intrawest went public on the stock exchange and since then had been sold to an American outfit. So I would imagine most of the shareholders that cashed out have done well on the now wholly legitimate Intrawest shares. It makes one wonder though about the shadowy world of high finance and what the real stories are.