Under an avalanche of debt, RAL looks to Govt for urgent rescue

Tuesday, 18 October 2022

It’s worrying local communities whose businesses are largely dependent on winter tourists. Video first published October 13 2022.

Stakeholders believe the only way to save Ruapehu Alpine Lifts from suffocating under an avalanche of debt is to ask the Government to come to its rescue.

Local iwi, shareholders, administrators, regional mayors and council representatives met on Monday to discuss the future of Ruapehu Alpine Lifts (RAL) after its board put the company into voluntary administration last week.

Newly elected Ruapehu district mayor Weston Kirton said the situation was so serious that the only way out was to ask the Government for a bailout, while PwC voluntary administrator John Fisk said they wanted “an audience with the key minister” as soon as possible.

RAL, which runs ski field operations at Whakapapa and Tūroa, went into voluntary administration after the combined effects of Covid-19 lockdowns and border closures, and a particularly poor ski season, left it almost $40m in debt.

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The administrators of Ruapehu Alpine Lifts say they need Government funding to save the mountain’s ski fields. Photo/File

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Ruapehu district mayor Weston Kirton is calling on the Government to help bail out Ruapehu Alpine Lifts. Photo/File

Kirton, who was not at Monday’s meeting but had been receiving updates from his council’s chief executive, said the situation was so serious the only way out was to ask for a Government bailout.

According to an Infometrics Regional Economic Profile of the Ruapehu district for 2021, tourism contributed $63.3m (8.5%) to the regional economy’s gross domestic product (GDP).

In 2018, that figure was $88.8m, or 12.1% of the region’s GDP.

“There’s a $100m business at stake here … and it’s too much of a risk for it to just close. We are all trying to find a way forward and keep the wolves at bay.

“From what I understand the banks are honing in, and it’s more serious than we first thought. A focus has been on getting urgent meetings with ministers to keep the business afloat.

The Tūroa ski field bore the brunt of a particularly poor ski season. Photo/File

“We all live in hope the ski season will return an income for them, but the risk is they come in and start mothballing and taking facilities away – we have to avoid that at any cost,” Kirton said.

Fisk said Monday’s meetings were “very positive” and there was a “real desire to come out of this process as a better, more sustainable operation … but for that we need funding”.

“We all agreed that we need to speak to people in Wellington, in Government, and our focus is now to get an audience with the key minister who could make that decision, and we would like to meet with them as soon as possible.”

Until that meeting goes ahead RAL’s future remains up in the air, but in a statement last week, Tourism Minister and Economic and Regional Development Minister Stuart Nash said no further Crown funding would be provided to the company in addition to the $15m in loans the Crown had already provided to RAL since 2018.

“Once a full report is provided by PwC, we will consider our options moving forward,” he said.

Nash said as of Tuesday, his staff had not received any further invitations to discuss the issue with RAL’s administrators.

RAL trustee and former RAL chairperson John Parker sent a statement on behalf of trustees.

In it, he said it was “truly gut-wrenching” to see Ruapehu Alpine Lifts going into voluntary liquidation “and we hope that the administrator and creditors are able to find a way forward that will allow snow sports to continue on Mount Ruapehu”.

”Our hope was that the government might recognise the importance that RAL has to the towns and businesses in the region and to those who have invested in skiing and life passes for the mountain.”

Long-time RAL employee and “token shareholder” Daniel Strueder said the announcement of voluntary administration came as no surprise, and it was time the trust was abolished to “allow RAL to find a new future”.

“Over the last 20 years while I've been working there on and off it has become clear that the goal was trying [to] create a Northern Hemisphere ski resort, this is not possible on Ruapehu as it is way too volatile with its weather.

“I would ask the Government, or any other person or group who is considering bailing Ruapehu Alpine Lifts out, to make a condition of the bailout to dissolve the trust.

“The ski fields are vital to the local economy, and it is very important that we do find a solution to keep them operating, but not in its current form,” Strueder said.