Thursday, March 8, 2007
American Skiing Co. said Wednesday that it is reviewing its options for the two Maine resorts it owns, including the possibility of selling the properties.
The decision to consider selling Sunday River and Sugarloaf was not unexpected because the company has been rapidly selling off its assets to pay down debt and raise as much money as possible for the investment fund that bailed the company out of a cash crunch in 1999. American Skiing faces a deadline of July 31 to redeem Oak Hill Capital Investment's preferred stock for $413 million and still has millions in long-term debt to pay off.
"As a result of our recently announced resort sales we've received a tremendous amount of interest in our remaining resorts," B.J. Fair, American Skiing's president and chief executive officer, said in a statement. "To ensure that we maximize the value of these assets, we will commence a review of options for our Maine resort properties."
The two resorts are Maine's leading ski areas, and the towns around them depend on the yearly influx of skiers to help support restaurants, shops and hotels in the region.
American Skiing, which was based in Maine until 2002, recently sold its Steamboat resort in Colorado and has deals pending to sell Killingon/Pico and Mount Snow in Vermont and Attitash in New Hampshire.
At one point, American Skiing had nine resorts, but it sold Heavenly, in California, in 2002. The recent sales leave it with just the two Maine resorts and The Canyons in Park City, Utah, where the company is now headquartered.
The company used the proceeds of the Steamboat sale to pay off about $190 million in long-term debt. Documents filed with regulators indicate that it has about $125 million of additional debt to pay off, and the company has already said it won't have enough to pay Oak Hill all the money it will be owed this summer.
Also, a property owner in Park City has sued American Skiing, claiming the company is in default of its lease on some land used by The Canyons, which could complicate any effort by the company to sell that resort. Fair said the company is trying to settle that suit.
Sunday River was the foundation of American Skiing, which was created by entrepreneur Les Otten. Otten bought the Newry resort in 1980, formed the company in the mid-1990s and set out on a buying spree to give the company resorts in New England and the West before taking the company public in 1997. Bad weather and a soft economy have contributed to the financial problems of the company, which has never made an annual profit in 10 years as a publicly traded company.
Otten, who stepped down from the American Skiing board last week, is considered a potential buyer for the two Maine resorts. He did not return a message left with him Wednesday afternoon, and David Hirasawa, American Skiing's director of investor relations, declined to comment on any potential buyers.
Hirasawa said the company attracted interest in its resorts after saying that it was reviewing strategic options for Steamboat last July.
"We are in a good position in terms of valuation," Hirasawa said. "To quell some of the rumors (about Sunday River and Sugarloaf), we are absolutely looking at all avenues for the resorts."
It's difficult to judge exactly what the resorts are worth, but Hirasawa noted that Sunday River attracts about as many skiers as Mount Snow, which is selling with Attitash for a combined price of $73.5 million, plus $2 million in debt. He said Sugarloaf's skier numbers fall in between Mount Snow and Attitash, suggesting that the two Maine resorts are worth more than $75 million.
Hirasawa said there's no deadline for the company's review of its options for the two Maine ski areas.
Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:
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