The company will be liquidated in court on Wednesday, with sales to the preferred bidders still a possibility
Both proposals for the future of Whakapapa and Turoa failed to fly at the company’s watershed meeting of creditors today.
Ruapehu Alpine Lifts (RAL) will head to a liquidation hearing in the High Court of Auckland tomorrow where it is understood the current voluntary administrators, PwC’s Richard Nacey and John Fisk, will be appointed as liquidators.
Two proposals were put to creditors of the company at the meeting, held simultaneously in Ohakune, Auckland and Wellington.
READ MORE: * Government offers taxpayer millions for Ruapehu buyers * Ruapehu ski fields file for ‘prepackaged liquidation’ * Ruapehu bidder backs out before big vote
Minutes before voting, RAL life pass holders, a major creditor group, were informed that those who had a shareholding in the company would be unable to vote.
When life passes were originally introduced, they came with one share in the company to allow for questions to be asked at annual meetings.
While that practice has ended, pass-holders have been able to acquire a share in the company for $1.
This stopped a considerable number of pass-holders, who had not previously been made aware of the rule, from voting.
In order to pass, the resolutions had to be approved by 50 percent of creditors attending and voting by number; and 75 percent of creditors attending and voting by value of debts.
Central government creditors, including the Ministry of Business, Innovation and Employment (MBIE) and the Department of Conservation, were owed the most by value, while roughly 14,000 life pass-holders were owed a total of around $30m, giving them the majority number of creditors.
The first resolution was a Deed of Company Arrangement put forward by Ruapehu Skifield Stakeholders Association, representing a group of life pass holders.
The association's proposal would have retained the current company structure and concessions relied on refinancing from roughly half of the life pass holders to the tune of $1,150 each for new passes, raising $7.5m as well as $2m of both debt and equity crowdfunding.
This proposal failed to meet the threshold, with votes in favour coming from 71.2 percent of creditors by number and 8.6 percent by dollar value.
The central Government’s proposal for a “pre-packaged liquidation” also failed, receiving votes in favour from 44.2 percent by number and 93.2 percent by dollar value.
That deal would have seen RAL placed into liquidation and the immediate sales of the Whakapapa and Turoa assets to their favoured bidders, Whakapapa Holdings and Pure Turoa.
The Crown would have taken a 25 percent stake in each entity.
Instead, RAL will head to a liquidation hearing in the Auckland High Court at 10am on Wednesday.
This third option was pitched as something of a nuclear option in an administrator's report released to creditors last week.
This scenario is unsatisfactory, and a worst-case scenario because the company is hopelessly insolvent,” the report read.
The administrators said there was potential for the transaction to proceed in this position, but there was a substantial risk for both the company and the ski season.
A leaked email memo sent on Tuesday by Chapman Tripp partner Michael Harper to Robert Pigou, head of MBIE’s regional and economic development arm Kānoa, provided value insight on what will happen now.
“If the High Court hearing is required, then the directors have requested that John Fisk and Richard Nacey are appointed liquidators. Once appointed as liquidators, they will sign and close the Ruapehu Transactions,” Harper said.
Perhaps the greatest unknown is the threat of local iwi and hapū seeking an injunction to stop the sale of the Ruapehu skifield businesses, citing lack of required consultation.
A source close to the situation told Newsroom this was a very real possibility, but wouldn’t say which local groups would be seeking a legal challenge.
