American Skiing Company (ASC) announced today that it has entered into a definitive agreement to sell its Killington and Pico ski and snowboard resorts in Vermont to SP Land Company, LLC, a major area landowner, for $83.5 million. SP Land will partner with Utah's POWDR corporation in the purchase and operation of the two ski areas. The announced sale follows the recent announcement of ASC's sale of Mount Snow, Vt. and Attitash, N.H. resorts for $73.5 million and the December announcement of the planned $265 million sale of Steamboat resort. This leaves ASC with Sugarloaf/USA and Sunday River ski resorts in Maine and The Canyons in Utah as its only remaining holdings.“Killington has been in partnership with SP Land since 2004 on a number of developable real estate parcels in the Killington area. During the design and planning phase of the Killington Village, it became apparent that the developable real estate and resort operations should be controlled by a single owner," said ASC President and CEO B.J. Fair. "We believe this transaction is a tremendous step forward for the future development of Killington, Pico and the surrounding community.”
SP Land Company, LLC is a real estate holding company with significant land holdings near Killington resort. SP Land Company, LLC first gained its real estate holdings in the area in conjunction with American Skiing Company’s restructuring of its real estate related debt in 2004. POWDR Corporation owns and operates Park City Mountain Resort in Utah, Lake Tahoe's Alpine Meadows ski resort, Mt. Bachelor in Oregon, and the Las Vegas Ski and Snowboard Resort. This deal will provide POWDR with its first Eastern ski resort interests.
Killington Resort, the largest ski and snowboard resort in the eastern United States, features an expansive lift network, the most extensive snowmaking system in the world covering 752 of 1,215 skiable acres and numerous off-mountain activities, including après ski, dining, shopping and lodging options. Stretching across seven mountain areas, including the separate Pico Mountain ski area which ASC long sought to connect with Killington via lifts and trails, Killington Resort features access to 200 trails and 33 lifts with one lift ticket.
“With the recently announced sales of Steamboat, Mount Snow, Attitash and now Killington and Pico, American Skiing Company is clearly in transition," Fair acknowledged. "We will be reviewing our organizational needs and adjusting accordingly. As a result of these transactions, the Company expects to repay all bank debt, junior subordinated debt, and have substantial resources to address the needs of our Sunday River and Sugarloaf resorts in Maine and The Canyons in Utah.”
Included in the sale of Killington and Pico are the resorts and all resort-owned operations, all of Killington/Pico’s resort-owned real estate assets and The Wobbly Barn restaurant. In addition to the cash purchase price of $83.5 million, the buyer will also assume approximately $5 million of debt and other liabilities and certain contractual obligations of ASC.
American Skiing at one time owned and operated 10 ski resorts in seven states across the U.S., but stifling debt load at high interest rates has forced the company to divest itself of most of its holdings. Subsequent financial difficulties led to its delisting from the New York Stock Exchange due to inadequate capitalization, among other financial pitfalls. Its senior credit line has been renegotiated on multiple occasions, and the company brought in Oak Hill Capital as an investor to shore up its financial resources. In March 2002, ASC announced the sale of Heavenly Resort, straddling the Nevada/California border at the southern end of Lake Tahoe, to Vail Resorts for $102 million. ASC in July 2005 completed the sale of southern Vermont's Haystack Ski Resort to a group of local businesspeople with plans to turn the ski area into an exclusive private resort community. Then, in December 2006, ASC entered into an agreement to sell Colorado's Steamboat Ski Resort to Canadian ski resort operator Intrawest for $265 million.
The proposed sales of the ASC resorts will not have an effect on any current season passes, vouchers or advance purchase ticket products for the remainder of the 2006-2007 winter season. Multi-resort products such as All-For-One and Ski America passes will continue to be valid at all ASC resorts where they previously have been honored through the end of the 2006-2007 winter season. Gift cards, Value Cards and Edge cards will continue to be valid in accordance with the terms of those specific programs.
As a condition of the purchase and sale agreement, stockholder approval is required for the sale of Killington and Pico resorts. The sole holder of the Company’s Preferred Stock Series C-1, representing 65.8% of the voting shares entitled to vote on the matter, has voted in favor of the transaction, which constitutes majority stockholder approval. Such approval means the transaction may be approved without a meeting of the Company’s stockholders. In addition to stockholder approval, the transaction is subject to customary closing conditions, including Hart-Scott-Rodino antitrust approval and consent of the State of Vermont. The transaction is expected to close on or before April 30, 2007.