PARK CITY, Utah (press release) -- American Skiing Company has signed an agreement with Textron Financial Corporation to resolve loan defaults under its Grand Summit Resort Properties ("GSRP") Construction Loan Facility. The agreement affects $42.6 million in outstanding real estate debt.
"This agreement is a significant milestone in the restructuring of our real estate operations," said CEO B.J. Fair. "Importantly, it allows us to meet our financial obligations to the City of Steamboat Springs for agreed upon Mount Werner Rd. and Transit Center improvements. In addition, it positions us to move ahead with revitalized sales initiatives that will accelerate the sell-down of unsold quartershare inventory and further reduce real estate debt."
The terms of the revised agreement relax mandatory principal amortization requirements and provide added liquidity to support ongoing sales and marketing activities of remaining quartershare units at The Canyons Grand Summit and Steamboat Grand hotels.
GSRP is a subsidiary of American Skiing Company Resort Properties ("ASCRP"), the real estate development subsidiary of American Skiing Company.
ASC reported that it is continuing negotiations with lenders to its senior secured credit facility for ASCRP but has not yet come to an agreement on how this facility will be restructured. The ASCRP senior credit facility, as previously reported, remains in default pending completion of these negotiations. Until the Company makes a public announcement regarding resolution of the defaults we refer investors to disclosures made in the Company's 10-Q filing dated June 12, 2002, on file with the Securities and Exchange Commission.
Bottom line: At the end of April, ASC debt totaled $489 million, and the company was paying about $50 million annually in interest. The stock sold for 22 cents on Wednesday. --S.M.