Lenders negotiate with American Skiing Company | TahoeDailyTribune.com
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Lenders negotiate with American Skiing Company

On the heels of “informal discussions” about its stock status, Heavenly Ski Resort’s parent company reached an agreement Tuesday with its lenders on changes to a $165 million financing package.

The announcement came a day after the deadline to negotiate terms on a $85 million default when the company failed to meet the earnings requirement spelled out in the loan.

American Skiing Company negotiated with a group of lenders led by Fleet National Bank to restructure a key component of the Newry, Maine-based ski operator’s strategic plan to improve its capital and financial status with shareholders and investors, spokesman Skip King outlined.



The company is also in talks to receive an infusion of capital from an unnamed source, King added as part of the plan.

“The amended facility lays the groundwork for completing the other aspects of the company’s financial restructuring package, so this is a major development in completing our objectives,” Chief Financial Officer Mark Miller stated.




American Skiing has scaled down its nationwide work force somewhat and plans to sell Steamboat ski resort in Colorado to raise cash.

ASC took a financial hit of $2.1 million for corporate restructuring moves and another $3.6 million from a withdrawn merger with MeriStar Hotels and Resorts.

The company’s debt more than doubled from 1996 to 1999 as it bought ski resorts. It went public in November 1997 at $18 a share, but the offering quickly reduced by half over the last few years.

In recent weeks, stocks on the New York Stock Exchange have hovered at 90 cents a share and dropped to 71 cents last week. Stocks closed at 91 cents Tuesday afternoon.

The announcement follows”informal discussions” with NYSE over the listing status of its stock. King said the NYSE is awaiting results of the restructuring plans before making any decision whether to delist the stock from the trading floor.

He declined to expand on the talks.

South Lake Tahoe financial consultant Cheryl Sillings calls a delisting as “the kiss of death” for a trading company.

“(It happens) any time they go under $1,” Sillings said Tuesday from her Brookstreet Securities Corporation office.

“If they can’t use the stock for currency, that’s a real problem. It’s been a problem for a lot of companies that have gone down in the single digits,” she said, pointing to dot-com companies that insiders now refer to as “dot-bombs.”

American Skiing’s market capitalization has fallen below $50 million for the past month.

“That’s what the exchange looks at,” Sillings said, defining the measurement as the ratio between the price per share and outstanding shares.

In addition to South Shore’s Heavenly, American Skiing’s properties include Sugarloaf USA and Sunday River in Maine; Attitash Bear Peak in New Hampshire; Killington, Mount Snow and Sugarbush in Vermont; and The Canyons in Utah.


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