The government will give a further $6 million to the cash-strapped Ruapehu Alpine Lifts to avoid it from collapse.
In a statement today, Minister for Economic and Regional Development Stuart Nash said more time was needed to explore options so liquidation could be avoided.
“This comes following the survey of life pass holders, which indicated some support, but fell short of the funding required to support a new entity to operate the Tūroa and Whakapapa ski fields, which means more time is required to secure funding for a new entity.”
The $6m would enable alternative solutions to be developed and provide enough to retain the organisation’s management team and was in addition to the $2m already given by the Crown.
“By providing this bridging finance we will be able to maintain staff who are critical to the maintenance of the assets on the mountain, and enable it to operate next winter,” Nash said.
“We are fully invested in exploring all options as we recognise the significant detrimental impact on the both the economies and wellbeing of local communities especially Ohakune.”
Life pass holders willing to help
The Ministry of Business, Innovation and Employment also asked Ruapehu Alpine Lift’s voluntary administrators to forward a letter and non-binding survey form to the ski fields’ lifetime pass holders to find out how many would provide funding support if a proposed new entity went ahead.
The new entity would operate the Tūroa and Whakapapa ski fields, including the Sky Waka gondola. The survey closed on Thursday 24 November.
In order to raise the necessary funding, it would have required a positive response from at least 6000 lifetime pass holders (or a little over half of the estimated 11,000 active lifetime pass holders, all of whom were sent the survey).
About 4500 lifetime pass holders responded to the survey and 2937 indicated they were willing to contribute $2500 now.
Of those respondents that indicated a willingness to contribute $2500 now, 2614 responded that they were willing to contribute $250 per annum for the next two or three years.
This represented a potential $7.34m now and $650,000 per annum of new funding from lifetime pass holders.
A separate, independent survey of the general public undertaken by the company’s voluntary administrators was understood to show potential for additional capital to be raised from this group.
Further investigation would need to be undertaken to assess whether these results could be materialised, given the broad nature of the survey.
The operator of Mt Ruapehu’s Tūroa and Whakapapa ski fields faced liquidation after the Government reportedly declined to provide a lifeline to keep it going until the 2023 winter season.
Ruapehu Alpine Lifts went into voluntary administration in October after the combined effects of Covid-19 lockdowns and border closures, and a poor ski season left it $45m in debt.
The voluntary administrators needed $9m to survive until the ski season opened. They had put together a $4m rescue package, from the Government and ANZ, but that money was due to run out by Christmas.
Voluntary administrator John Fisk held a public meeting in Ohakune on Wednesday night, and said Monday’s Cabinet meeting advised there was no more money available, according to a Facebook post by Owhango Community Board member Murray Wilson.
Sam Clarkson, founder of the Save Mt Ruapehu Skifields Group, said the Cabinet decision not to inject more funding was baffling.
Either way, taxpayer money would be needed but the most expensive option was liquidation, Clarkson said.
Fisk was contacted for comment.
A spokesperson for MBIE said the Crown extended bridging finance of $2m in a ‘one-off’ loan, which was matched by ANZ.
That was to provide sufficient working capital to retain the RAL management team while a potential resolution was being negotiated.
“Issues remain challenging, and Government is continuing to consider the situation.
“There is no further update at this stage.”
The cost to the Crown to remove the ski field infrastructure from Mt Ruapehu and return the area, in a National Park, to its natural state was estimated at up to $100m. There would also be revenue loss for local businesses.
“The taxpayer has two choices here, pay up about $10m or $15m to rescue RAL or pay $100m to slaughter the Central North Island economy, and Cabinet has given no reason why,” Clarkson said.
“It’s just fiscal madness.”
Last month, the Ministry of Business, Innovation and Employment asked the administrators to survey RAL’s 14,500 life pass holders to see if they would financially support a new entity to operate the ski fields.
A further $10m to $15m was needed to set up the new entity.
Source: courtesy of Stuff.co.nz
Picture: courtest of NewsTalk