International (Europe/Japan/Southern Hemisphere) New Zealand - company behind operations at Mt Ruapehu ski fields has gone into liquidation

[Wasatchman]

Personally, iwi is a much better option than government. Iwi have an enduring interest in the area, including local economies, and they won't sell down the track. Multiple Iwi have solid track records in toursism ventures and business development.

If the Iwi put up a reasonable sum to purchase the ski fields then I think that would be a good outcome.

But as I said previously, I think it would be grossly unfair to the Crown and taxpayers to simply give it away for little or no money. The Crown would be better off keeping it if they can't sell for a reasonable sum because at the end of the day they are ultimately the largest financial backers and would continue to financially support the operations in the event of another failure.

 

[Turoa Kiwi]

Some significant new developments this afternoon (our time).

Both ski areas will open this season, on time, snow and volcanic activity permitting. The government has underwritten winter operations up to $5M, so that the liquidators can pay all creditors for the season if it is a bad season. The liquidator did note that the ski areas usually run cash flow positive over the ski season.

The other new development is Te Ariki Tā Tumu Te Heuheu, the paramount chief of Ngati Tuwharetoa, a local iwi (tribe) (indigenous people) has notified an expression of interest to take over the ski operations on the mountain. To be honest, I was surprised that they were not an original bidder.

This is good news, but I wonder why its taken so long for them to show interest?
I wish them and whoever ends up owning it all the best

Over here that usually means it’ll be a casino too.

Nope. We don't want one . And anyway Mt Ruapehu is not really on a main tourism trail so it would ending up sucking money out of the locals pockets. Just NO.

If the local Iwi take over, I wonder if there is a chance of opening up more of the mountain. Not sure about Turoa, but at Whakapapa there would seem to be ample space to extend one of the T-bars to a higher elevation maybe even outside the existing ski area boundary.

Whakapapa Trail map

Explore the ski resort and discover new slopes! See complete trail map from Whakapapa with slopes and lifts.

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Whilst it is a big mountain the local Iwi,(tribes) have been steadfastly against this for years and years. A couple of the local Iwi's even suggested closing the mountain for a season or two to let it "rest"
There would be a huge uproar and mud on their faces if they get to run the new operations, and then turn around and expand the commercial ski areas for their commercial gain
Note though, that there is quite a big back country skiing fraternity here and that anyone can ski anywhere, but commercial exploitation outside the current designated boundaries is strictly off limits. There isn't even any heliskiing or cat skiing allowed outside of the ski area boundaries. The other small club field on the Eastern flanks, Tukino, has a cat skiing operation, but it runs only inside its allowed concession area.
There is some great lift accessed out of bounds skiing at all fields already, and I for one don't want to see these areas further exploited. Black Magic ,The Glacier, Solitude and Outer Limits are all spectacular areas that reward experienced skiers that want to take the trouble and some risk, to get to and out of, with awesome, mostly untracked skiing when conditions allow.
I don't think that these areas will get developed as the then newly adjacent back country areas are seriously gnarly terrain where rescues and recovery would prove incredibly difficult. Read "multiple deep long gullies that fan out and well away from the resort base areas"
Up the mountain would be the only feasible expansions but that will happen at Turoa as its at least a 30degree slope above the Top of the High Noon chair and its already a well recognised avalanche path
Over at Whakapapa there were plans to take out the Valley T bar and replace it with a realigned and new quad chair that would top out somewhere near the Valley Traverse and the top of the Knoll Ridge.

Its great news that there will be skiing on the mountain this year, but as we still need the snow gods to deliver up here, I'm jumping on the ferry from Wellington tomorrow morning, to deliver a car that my daughter has just brought
How unfortunate for me that she lives in Queenstown. Just in time for a predicted snowfall this coming weekend.....

 

[Turoa Kiwi]

If the Iwi put up a reasonable sum to purchase the ski fields then I think that would be a good outcome.

But as I said previously, I think it would be grossly unfair to the Crown and taxpayers to simply give it away for little or no money. The Crown would be better off keeping it if they can't sell for a reasonable sum because at the end of the day they are ultimately the largest financial backers and would continue to financially support the operations in the event of another failure.

They've only got to offer four dollars and that is twice what the total of the other two offers were.......
I'm sure the government should be happy with a 25% stake in an Iwi led ownership.

 

[Wasatchman]

They've only got to offer four dollars and that is twice what the total of the other two offers were.......
I'm sure the government should be happy with a 25% stake in an Iwi led ownership.

The other two offers stink and should not be accepted. The Crown should simply keep the ski fields unless they receive a bid in the millions. They shouldn't give it away and be satisfied with 25%. They are the largest creditor and ultimately the financial backstop of the venture anyway.

Why on earth would they give away the ski fields and any upside potential when they are ultimately on the hook financially if it fails again. Not to mention all the money they have already loaned and spent on the ski fields. As I said, anyone who would be able to buy this cheap gets a heads I win and tails you lose scenario. That seems unacceptable to me for the Crown and taxpayers.

 

[geepers]

There would be a huge uproar and mud on their faces if they get to run the new operations, and then turn around and expand the commercial ski areas for their commercial gain

They could always consult with Jay Monahan. (Too soon...?)

 

[Turoa Kiwi]

They could always consult with Jay Monahan. (Too soon...?)

I had to look him up.
It would be way worse for the mana (respect) of all iwi and their leaders everywhere in NZ if it did happen. PGA golf is and has always been a soulless commercial operation with no affiliation to the land or water which is very important to Māori.

 

[Turoa Kiwi]

The other two offers stink and should not be accepted. The Crown should simply keep the ski fields unless they receive a bid in the millions. They shouldn't give it away and be satisfied with 25%. They are the largest creditor and ultimately the financial backstop of the venture anyway.

Why on earth would they give away the ski fields and any upside potential when they are ultimately on the hook financially if it fails again. Not to mention all the money they have already loaned and spent on the ski fields. As I said, anyone who would be able to buy this cheap gets a heads I win and tails you lose scenario. That seems unacceptable to me for the Crown and taxpayers.

The Life Pass Holders group may well disagree with this statement
They have paid millions to get the major infrastructure where it is now.
And are a recognised major creditor
There is still a long shot possibility they may be able to get a realistic offer on the table
If the business model that worked for near on 70 years but then failed mainly because of the change to debt funding why can’t the Government write off the debt as they have said they will and offer it back to a new RAL under different management.Along with the cash injection that was offered to the other bidders

 

[RNZ]

The Life Pass Holders group may well disagree with this statement
They have paid millions to get the major infrastructure where it is now.
And are a recognised major creditor
There is still a long shot possibility they may be able to get a realistic offer on the table
If the business model that worked for near on 70 years but then failed mainly because of the change to debt funding why can’t the Government write off the debt as they have said they will and offer it back to a new RAL under different management.Along with the cash injection that was offered to the other bidders

As would Iwi, who are secured creditors to the of about $11M for the Sky Waka (gondola) bonds issue.

No one is going to put a substantial cash offer on the table. The government has shown its hand.

Here is an article that explains a bit more about the debt situation and why the government will not operate the ski area. It also gives you a basic idea of iwi affiliations to the mountain and the cultural significance of the mountain, including why access to the peak will never be an option.

If you're really keen this gives you a good insight into what the 170 years of the issues that are yet to be redressed.

 

[Wasatchman]

@RNZ and @Turoa Kiwi

The government is by far the largest creditor. They were owed $15m as of October 2022 plus another roughly $10m they have funded to keep things going since October. But then you have another $100m that would be the cost to tear down the lifts and remediate the mountain should operations cease. So they are ultimately by far the largest creditor as ultimately acknowledged in the news segment that @Turoa Kiwi provided a link to.

I hate to say it but the lifetime pass holders should be considered equity funding that is now worthless with the bankruptcy of RAL. The lifetime passholders are not creditors and the government treating them as such is an act of kindness versus reality. The lifetime pass was not debt but essentially equity in the form of lift pass benefit. The lifetime pass was NOT a loan that was meant to be paid back.

If nobody puts up a substantial amount of money to acquire the ski field assets then the government might as well keep it. Anybody who would be able to purchase it for next to nothing essentially gets a massive gift. That strikes me as grossly unfair to the taxpayer. I would love to be able to acquire the ski field assets for $5,000. If it works financially then I get all the upside, and if it doesn't work I can say oops, here you go, you can have it back NZ government. How is that even remotely fair?

And the worst part of it all is that if the government does provide such a gift, they will choose who receives such a gift rather than an open bidding process. Believe me if it were an open bidding process I would love to bid NZ$50,000. Who wouldn't? As I said you get all the upside with very limited downside financial risk.

Taxpayers shouldn't be angry if the government keeps the ski field but instead should be furious if they give it away at this point. That's why the iwi were frustrated. They were like hey, if you're going to give away the ski fields as essentially a gift, we would like them. So would i for that matter. As I said, who wouldn't? Whoever the government would choose to essentially give the ski field assets too gets a massive sweetheart deal. That is completely unfair. The taxpayer takes all the downside financial risk if it doesn't work (cost of remediation) but gets none of the upside. Taxpayers who would want the government to give away the ski field assets don't understand that the government is ultimately going to continue to financially bailout the ski fields anyway if they lose money. The receiver has zero risk if they don't put up some initial money. So why on earth would you give it away then.

 

[geepers]

I had to look him up.

Not intended as a serious comment. Although money has a funny way of bringing out humans' latent ability for rationalisation.

There was a whole thread where Monahan got numerous mentions.

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How is that even remotely fair?

That's describing most of the western world's late 20th century asset privatization.

How about there an approach where the Govt retains ownership and collects a leasing fee. That could be an open tender - best all round offer wins, say, a multi-year operating rights. Govt is guaranteed an annual fee and doesn't need expertise in snowfield operation.