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Having unloaded seven of its eight resorts in recent months, Park City-based American Skiing Co. announced Thursday that it is shedding its corporate skin as well.
Technically, American Skiing Co. is dissolving as a corporate entity. Its remaining assets, principally The Canyons Resort outside of Park City, will become the property of Oak Hill Capital Partners, a private equity firm that was American Skiing's majority shareholder.
Visitors to The Canyons next winter should not see anything different about the resort operations than they have in the past, vowed a pair of American Skiing executives, David Hirasawa and Chip Carey.
"The resort will continue operating as normal," said Hirasawa, American Skiing's financial analyst and investment relations manager. "All the plans we've been working on are moving ahead. We will invest in the resort at a high level. Plans for the golf course are still in process. There's no end to any of the exciting changes going on at the resort."
Added Carey, the company's senior vice president of marketing and sales: "We really think this is good for The Canyons and its long-term success. The Canyons is a growth resort. It's had a huge history since 1997 when we came in . . . The more we invest in it, the greater the value of the resort is going to be."
Their positive view of the legal maneuver, revealed in a filing with the U.S. Securities and Exchange Commission, was shared by Ski Utah President Nathan Rafferty.
"I'm pleased to see that they'll be focusing all of their efforts on one resort," he said. "The Canyons has always been their crown jewel with plenty of untapped potential, including solid leadership and a strong sales/marketing team. It should be good for Utah locals and destination visitors alike."
A union official who represented unionized ski patrollers in their contract negotiations with the company last winter said he did not expect the ownership transfer "to have any real effect. I don't foresee any differences," said Lew Ellingson of the Communications Workers of America.
The SEC documents said company directors made the decision to dissolve American Skiing on June 6. Two days earlier, American Skiing sold its last two resorts in the Northeast - Sunday River and Sugarloaf in Maine - to Boyne Corp., which operates Brighton Resort, for $77 million in cash and the assumption of $2 million in debts.
That left American Skiing with an obligation of $404 million to Capital Hill, due July 31. But since "the company's available cash and the value of its remaining assets will not be sufficient" to pay that obligation, directors decided dissolution was the best option.
The SEC filing said common stockholders and Class A common stockholders, who together hold 31.6 million shares, are unlikely to receive any financial distributions on their stock and may be liable to creditors.
Formal dissolution will take place in about three weeks, the document said. At that time, American Skiing no longer will be a publicly traded company and no further reports will be filed with the SEC. Some layoffs are expected at American Skiing's corporate offices in Park City.
Oak Hill Partners has "representative" investments in 37 companies whose interests include financial services, health care, telecommunications, technology and consumer, retail and distribution companies. TravelCenters of America and Bell + Howell are two of the better-known companies.
The dissolution agreement gives Oak Hill Partners the opportunity to sell the resort, but Carey insisted "that's not a foregone conclusion . . . and it could take up to three years to dissolve the company."
One of the uncertainties that remains is a lawsuit being fought against Wolf Mountain, former owner of The Canyons Resort, which claims American Skiing was delinquent on payments and should lose The Canyons.
That case is scheduled to go to trial next spring. Hirasawa said "we are still very focused on the successful completion of that litigation."
Ownership of The Canyons Resort outside of Park City is being transferred from the dissolving American Skiing Co. to Oak Hill Capital Partners, a private equity firm that manages $4.6 billion of private equity capital and has been involved in more than 50 corporate transactions since the mid-1980s. It has significant investments in 37 companies, including:
* Bell + Howell Co., information products and services provider.
* Caribbean Restaurants, Inc., the Burger King franchisee in Puerto Rico.
* Duane Reade Inc., largest drugstore chain in New York City.
* MeriStar Investment Partners Lessee LP, which has several hotel properties.
* National Re Corp., a property and casualty reinsurance company.
* Oreck Corp., a direct marketer and retailer of vacuum cleaners and home and commercial floor-care products.
* Travel Centers of America Inc., the nationwide operator of full-service travel centers in 40 states and one Canadian province.
Source: http://www.oakhillcapital.com