The Sky Waka on the Whakapapa Skifield was built in 2018 with $10 million in loans, which included $500,000 from Ruapehu District Council.
The Government decision to inject a further $5 million to get the ski season up and running on Ruapehu gives Price Waterhouse Cooper (PwC) liquidators more time to decide who will get to own and run Tūroa and Whakapapa Skifields.
Separate bids to privatise them, put forward by Whakapapa Holdings Ltd (WHL) and Pure Tūroa (PTL), have been the favourites up until a few days ago. But despite urgency to get lifts up and running for the current snow season, a late bid put forward by Te Ariki Tā Tumu Te Heuheu, on behalf of Tūwharetoa, seems to have slowed down the decision-making process expected to have been concluded this week.
Previous operators Ruapehu Alpine Lifts went into voluntary administration owing more than $45 million last October. Then last week, following the failure of a creditors meeting to vote in any of the prospective new owners, RAL filed for bankruptcy. Its lawyer, David Friar said RAL was “hopelessly insolvent and unable to pay its debts”, having been impacted by pandemic closures and a lack of snow over the last few years.
One bid still on the table is from the Ruapehu Skifields Stakeholders Association (RSSA), which would effectively take over concessions held by the now defunct RAL, to continue 70 years of public ownership of the skifields.
RSSA’s bid has not been supported by the voluntary administrators, or the Ministry of Business Innovation and Employment on the grounds that having to rely upon crowd funding, it appeared to be under capitalised.
But only RSSA could hit the ground running, while the private companies remain subject to the approval of DOC and local iwi, a process which demands substantial negotiations. And as this went to press the lack of agreement on granting concessions to run the skifields appeared to be the main obstacle blocking a decision by the liquidators.
RSSA could not match the capital available to WHL and PTL but by the conclusion of the creditors meeting last week it had apparently received pledges of capital amounting to $2 million and it planned to obtain the additional funds required for the forthcoming ski season, plus beginning to pay off creditors. These funds were to have been obtained from life pass holders’ contributions and a public share offering – and there are still 14,000 life pass holders out there, many of whom supported RSSA’s bid.
The bids from Whakapapa Holdings Ltd and Pure Tūroa had plenty going for them. They were to be allowed to purchase one ski field each for just $1 and they would begin moves to pay back unsecured creditors, which includes $500,000 owed to Ruapehu District Council.
The Crown would also provide WHL and PTL confidence by taking a 25% stake in each private ski company, while MBIE and major creditor ANZ would also write off the old debts owed to them by RAL.
The Government would even guarantee they would not get lumbered with the risk of paying for the mountain to be remediated, should skiing ever cease due to unknown factors, such as possible eruptions or the effects of climate change.
RSSA was not offered the 25% Government stakeholding, the debt forgiveness or remediation guarantees, which means they were effectively fighting with one hand tied behind their backs. But its lawyer Peter Thomson was not despondent, saying community ownership is still very much on the cards.
“But it might have to be alongside an iwi collective, a private buyer or another model. That could be a very good thing. Our community effort was never a play for exclusive ownership, on the contrary the whole thing is about bringing people together to support the skifields,” Peter said.
“The Tūwharetoa proposal could be the start of a potentially excellent approach to long-term asset alignment, regional tourism connections and local employment. But like all bidders they need to be given enough time, respect and breathing room to form their own joint ventures, partnerships and alignment of local interests.”
Peter said the Stakeholders Association had always been focussed on good governance, transparency, and re-investment of any profits into the skifields and local community.
“From the outside it seems that some form of iwi ownership could be an exciting new phase for the skifields and one that sees the lifts turning for generations to come.”
