American Skiing Co. might own just The Canyons
June 9, 2007
Park City-based American Skiing Company announced the pending sale this week of its Sunday River and Sugarloaf/USA resorts in Maine, meaning the ski empire created by Les Otten that once owned eight U.S. resorts now owns just one: The Canyons.
"The longstanding relationship between ASC and the communities of Sunday River and Sugarloaf/USA extends to the very origins of our company," B.J. Fair, president and CEO of American Skiing Co., said in a prepared statement. "With so much of our roots and history here, it will be hard to part ways with these resorts."
By purchasing the two resorts for $77 million, Boyne USA, Inc. would assume $2 million in debt and other liabilities, according to American Skiing Company brass.
Boyne is a privately held company headquartered in Michigan that owns Brighton, Big Sky Resort in Montana and Crystal Mountain in Washington state.
Selling the Maine resorts means downsizing the publicly traded company’s staff that is based at the Gateway Center in Park City.
"When you talk about the amount of change that ASC as a corporate group has gone through in the past six months clearly, there is a need that diminishes in terms of the amount of resources needed to effectively operate and manage a portfolio of eight resorts now we expect in July being reduced to one," American Skiing Co. spokesman Dave Hirasawa said.
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He couldn’t say how many employees would lose their jobs as a result of the cuts.
"There will be less need for the corporate group in terms of number of positions and responsibilities to oversee a much smaller portfolio," Hirasawa said.
By selling seven resorts since December, American Skiing Co., once the largest operator of ski resorts in the country, could amass nearly $500 million in working capital, some of which to pay off debt.
"We’re debt free," Hirasawa said. "We don’t have any more outstanding debt. What we do have is preferred stock and common stock."
The owners of common stock in the company, however, shouldn’t expect a return on their investment any time soon. The stock, which trades under the ticker symbol, AESK, was selling for 22 cents per share on the Over the Counter Bulletin Board Friday afternoon.
"We don’t expect proceeds to be available for the common stock," Hirasawa said, adding that ASC must pay Oak Hill Capital Partners, a Texas investment firm that is the sole holder of the preferred stock. "Preferred stock is a combination of both principal and accrued dividends."
Moving forward, officials at American Skiing Company are focused on improvements at The Canyons and resolving litigation involving the company and its landlord, Wolf Mountain Resorts, explained Tim Vetter, a vice president at The Canyons.
"It’s a transition going on and because this last event just happened less than a week ago, those are the issues that are being analyzed right now as to how best to operate the organization," Vetter said. "Most everybody at the resort is looking at that as an opportunity right now."
Hirasawa says American Skiing Company does not plan to sell The Canyons.
"There are certainly rumors," he said. "If you look back over the last several years, The Canyons is one of the few really strong growth stories in the ski resort industry."
Other resorts sold this year by American Skiing Co. include: Steamboat in Colorado, Mount Snow in Vermont, Attitash in New Hampshire, and Killington and Pico in Vermont.