A draft report reveals the Govt has already moved to seal the fate of Whakapapa and Turoa, despite calls to hold off until next week's big creditors' meeting. Andrew Bevin reports.
A “pre-packaged liquidation” is the preferred outcome for Central Government and the administrators of Ruapehu Alpine lifts, according to a draft report obtained by Newsroom.
According to the report, two key proposals will be put to creditors at the company’s watershed meeting next Tuesday, the first coming from the Ruapehu Skifield Stakeholders Association, and the other being a “pre-packaged liquidation” developed by the crown.
In order to pass, the first resolution must be approved by 50 percent of creditors attending and voting by number; and 75 percent of creditors attending and voting by value of debts.
READ MORE: * Ruapehu bidder backs out before big vote * Ruapehu hapū warn Govt against selling ski fields without asking Māori * Ruapehu skiers to decide fate of mountain
The Department of Conservation and MBIE are collectively owed more than $100 million and have considerable voting power, but not the numbers.
About 14,000 life passes have been sold over the years, valued at a total of about $30m in the administration, so even without mass voting turnouts they have considerable voting power.
If it fails to fly, the second option will be put to creditors. If that doesn’t pass, the company will be returned to its directors “hopelessly insolvent” and liquidated.
The options
The Ruapehu Skifield Stakeholders Association proposal for a deed of company arrangement to retain the current company structure and concessions relies on refinancing from roughly half of the life pass holders to the tune of $1,150 each for new passes, raising $7.5m as well as $2m of both debt and equity crowdfunding.
PWC administrators Richard Nacey and John Fisk said it was not in the best interests of creditors to vote for the proposal as it also relies on creditors being repaid on uncertain terms and other debt being forgiven where no agreement has yet been reached.
The Government’s “pre-packaged liquidation” option would see Ruapehu Alpine Lifts placed into liquidation with immediate sales of the Whakapapa and Turoa assets to their favoured bidders, Whakapapa Holdings and Pure Turoa.
The crown will take a 25 percent stake in each entity.
Pure Turoa is made up of Ohakune business couple Christine and Greg Hickman, property developer Cameron Robertson and businessman Bruce Stockwell.
Whakapapa Holdings is fronted by local industry veteran Dave Mazey, the ski field boss who merged the two fields when Turoa was last in administration, and financed by The South Island Office, a Christchurch-based investment group led by another ski industry veteran, Tom Elworthy.
Life pass holders will either be able to purchase heavily discounted multi-season passes or renew their life passes for between $599 and $1,850, depending on the field.
Life pass holders who don’t choose to take up one of these offers will have a claim in the liquidation of Ruapehu Alpine Lifts.
Under this proposal, all staff will be paid their claims in full and offered new employment contracts.
This is also PWC’s preferred option, but it does rely on Department of Conservation concessions that haven’t been approved yet.
A hearing to liquidate Ruapehu Alpine Lifts is scheduled in the Auckland High Court for the day after the meeting.
If the liquidation takes place without the second deal being approved, the assets could still be sold to the bidders, but with far more risk.
Uncertainty
With the season expected to start in just weeks, uncertainty is taking a toll on RAL staff, who are also creditors in the administration.
A staff member who spoke to Newsroom, and who didn’t want to be named, said they were left waiting and wondering.
“We know nothing. We know as much as they're letting out there. I got an email from PwC the other day just saying hang in there and things are afoot and it's moving forward.
“There’s definitely a bit of uncertainty out there, two lift operators have started, two more start on Thursday. Another lot start of the 26th and the rest start on July 3, but it's neither here nor there, what they do is what they do and I suppose we’ll find out.”
They said it was particularly difficult for staff who had come in from abroad to work the fields. “They’re coming in from overseas and asking for accommodation and getting all that sorted, but Christ, who knows what’s going to happen.”
He said a toxic culture stemming from management down the chain would hopefully change with the new business.
“I really hope it does go ahead, but it’s got to be done properly.”
The stakeholders association and Ruapehu hapū have both called for the sales process to be put on ice, saying it's being rushed, that adequate consultation hasn’t happened, and calling for transparency.
