Pass holders asked for help

Ruapehu Alpine Lifts’ 14,500 life pass holders are being asked if they would financially support a new entity to operate the skifields, with ANZ and the Crown writing down $28 million if they agree.

Life pass holders were warned if they did not agree to put in $2500, plus an extra $250 a year for the next few years, a Government plan would not proceed and the liquidation of Ruapehu Alpine Lifts (RAL) was likely.

Last month the operator of the Ruapehu skifield went into voluntary administration after a number of problems, from lack of snow to the lingering effects of Covid, formed a perfect storm.

RAL had racked up about $45 million in debt.

MBIE was asked by the Government to investigate whether a skiing business and the Sky Waka gondola could be sustained on Mt Ruapehu under a new structure.

On Thursday it asked the voluntary administrators to survey life pass holders on their willingness to financially support its proposal.

‘‘As we are all aware, the current financial position of [RAL] is impossible,’’ said Robert Pigou, head of the Ministry of Business, Innovation and Employment’s regional economic development unit, in a letter to the voluntary administrators.

The not-for-profit RAL had had limited avenues to raise capital, and offered life passes when it needed to fundraise. It sold a batch of life passes for $3950 each in 2017.

MBIE’s plan involved the transfer of RAL’s assets to a new entity, with ANZ and MBIE effectively writing off their combined $28m historical debt support.

The new entity would operate the Turoa and Whakapapa skifields, including the Sky Waka gondola. It would agree to honour the life passes of those life pass holders who paid a $2500 transfer fee and agreed to pay future levies of $250 a year to fund ongoing maintenance and capital expenditure.

An estimated $15m to $20m was needed to restart the skiing business and Sky Waka gondola, to ensure the new operator had enough liquidity to continue in the longer term, pay for deferred maintenance, and meet outstanding finance and rescue costs.

The Government needed to understand the likely financial support from life pass holders for the commercial transaction before it could continue.

If the pass holders did not agree, ‘‘then this commercial transaction will not be feasible, and there may be no other options to maintain operations at Mt Ruapehu and it is likely that RAL will be liquidated’’, Pigou said.

He also warned there was no guarantee of success even if the deal went ahead.

The Government was ‘‘acutely conscious’’ of the impact a collapse of RAL would have on the communities and businesses surrounding Mt Ruapehu.