Best option is for Ruapehu Alpine Lifts to go into liquidation, administrators say

Wednesday, 14 June 2023

Administrators of Ruapehu Alpine Lifts have backed the liquidation of the company being the best outcome for the skifields.

Creditors of Ruapehu Alpine Lifts (RAL) have been told they must choose between three options for the future of the skifields – but handing it back to directors would be a “worst-case scenario”.

Ruapehu Alpine Lifts (RAL) went into voluntary administration last October owing $45 million. The administrators said Covid-19 restrictions and a poor season had meant it could not continue.

A watershed meeting for creditors will be held on June 20 and will include a vote on the best option for the future of the skifields.

Administrators John Fisk and Richard Nacey of PWC said in their latest report that there were three.

The first was executing the Deed of Company Arrangement (DOCA) proposed by the Ruapehu Skifield Stakeholders Association (RSSA).

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This proposes to retain the current company structure and relies on life-pass holders purchasing new life passes to retain their right to ski, and crowdfunding to generate capital.

The second was executing a “pre-packaged liquidation”.

The terms of this option have been developed by the Crown and involved the sale of the Whakapapa and Turoa ski fields to two new entities, Whakapapa Holdings and Pure Tūroa (PTL).

Minister of Regional Development Kiri Allan said this option would include Government support that would mean previous debt owed to Kānoa and the Department of Conservation would be written off, including contingency for the removal of redundant infrastructure.

The Crown would take a 25% shareholding in both PTL and in WHL through Crown Regional Holdings (CRHL) and will provide a loan to each entity.

CRHL and ANZ would both agree to a partial release of their respective security interests over the assets of RAL to allow the transactions to proceed.

PTL would offer life-pass holders the opportunity to purchase multi-year season passes for Tūroa, for up to five years with a 60% discount off the full price.

WHL would offer life pass holders the opportunity to renew their life pass for $1850 for the Whakapapa ski field for those passes originally purchased prior to 2018 or 2019.

If resolutions to execute either the Deed of Company Arrangement or to execute the “pre-packaged liquidation” do not pass, the administration will end and control of the company will be returned to the directors.

The administrators said the best outcome for creditors was option two.

It said returning the company to directors was the worst-case scenario because the company was “hopelessly insolvent” with liabilities significantly exceeding the realisable value of assets and without enough money to pay debts as they fell due.

A loan from the Crown and ANZ of $10.5 million was likely to be fully used by the watershed meeting, and no further funding would be available.