Ruapehu Alpine Lifts given temporary lifeline from Government

Government loan will help ski fields at Mt Ruapehu buy time.

The Government has agreed to give Ruapehu Alpine Lifts a $6 million loan to prevent the company from being liquidated and to enable the ski fields at Mt Ruapehu to open over winter.

It hopes the finance will buy time while stakeholders find a long-term solution for the struggling company that runs the Whakapapa and Tūroa ski fields.

Ruapehu Alpine Lifts went into voluntary administration in October. Covid-19 exacerbated long-standing issues, including a lack of snow.

Voluntary administrator PwC’s John Fisk last week told the Herald, “Without government support then we’re really looking at liquidation, and we’d have to call a watershed meeting right before Christmas. We’re right at the edge here.”

Today, he said the Government’s provision of $6m was “good news”.

Fisk said this would help keep staff employed, enable the Sky Waka gondola to stay open over summer, and mean preparations could be made for the 2023 ski season.

Indeed, Minister for Economic and Regional Development Stuart Nash said the $6m would provide sufficient working capital for Ruapehu Alpine Lifts’ management team to be retained, while a potential longer-term solution is negotiated.

He said it was important to allow time for the Ministry of Business, Innovation and Employment, through Kānoa Regional Economic Development and Investment Unit, to support the development of an alternative commercial solution.

He noted a survey indicated some life pass holders were prepared to stump up cash to support the company, but this still fell short of the funding required to support a new entity to operate the ski fields.

The $6m is in addition to a $2m loan previously provided by the Crown.

Fisk last week outlined the company had $32m in secured debt and more than $12m also owed to unsecured creditors, including staff and 14,500 life pass holders.

At least $15m was needed to establish a new, sustainable, structure.

The cost of deferred maintenance totalled $25m. Meanwhile cessation of activity on the mountain was likely to trigger up to $100m in remediation costs, and cost the region a similar amount in annual economic activity. Up to 1580 jobs would be lost.

Nash said, “We are fully invested in exploring all options as we recognise the significant detrimental impact on both the economies and wellbeing of local communities, especially Ohakune.

“Any decision regarding the future of operations on Mt Ruapehu needs to be considered and robust, but also realistic about the ongoing cost of such operations.”