Industry News
In a last-minute development, the New Zealand Government has loaned up to NZD 5 million to ensure the ski season on Mt Ruapehu proceeds as planned. The Regional Development Minister, Kiri Allan, announced the funding today to save hundreds of jobs and prevent significant economic loss to the region if the season couldn’t proceed. The Government initially declined in December to provide a lifeline to keep it going.
The loan, provided to the Ruapehu Alpine Lifts (RAL) liquidators, will buy crucial time for the liquidators to consider potential purchasers for the business and its assets. Minister Allan emphasized the Government’s unwavering commitment to enabling the ski season on Mount Ruapehu to proceed. Cabinet’s decision has now solidified the prospects of a successful season.
- Related: Twin Ski Areas at Mt Ruapehu, New Zealand, Saved But Could Be Split Into 2 Separate Ski Resorts
The recent meeting of major creditors, including the Government, ski pass owners, and ANZ Bank, failed to garner sufficient support for the proposed options to salvage the commercial operations of the ski fields. Subsequently, RAL was placed into liquidation. However, the Government continued its efforts to find a solution allowing the ski season to go ahead.
RAL was placed in voluntary administration in October after a below-average 2022 snowfall forced an early closure of most of the ski field. The snow that fell early in the season was washed away in August by La Niña rains. After two years of Covid-19 lockdowns, the struggling operator could not afford to continue operations and was forced to file for voluntary administration. The two resorts had been struggling for several years and initiated a Life Pass Holder option for around NZD 5,199 a year to raise additional revenues. The embattled operator was saddled with NZD 45 million (USD 29 million) in debt and would require at least NZD 9 million (USD 6 million) to survive until the 2023 ski season. The voluntary administrator, John Fisk, had assembled an NZD 4 million (USD 2.5 million) rescue package from the New Zealand government and Australia and New Zealand Banking Group Limited (ANZ).
RAL, renowned for operating the Tūroa and Whakapapa ski fields, traditionally employs around 700 individuals during winter. Minister Allan highlighted the significance of Ruapehu’s contribution to the central North Island economy, accounting for approximately one-tenth of the region’s GDP, amounting to $100 million annually. Ensuring the season proceeds will save hundreds of jobs, bolstering local tourism, the regional economy, and the community while a long-term resolution is sought.
A new contender is interested in taking over the ski operations on the mountain. Te Ariki Tā Tumu Te Heuheu, representing Tūwharetoa, has emerged as an additional potential player. Their interest joins the previously received expressions of interest from Whakapapa Holdings and Pure Tūroa ahead of last week’s creditors’ meeting. The Government is evaluating the three bids for support, with the Ministry of Business Innovation and Employment set to engage with the interested parties.
The financial struggles faced by RAL date back to last year when the company voluntarily entered administration, burdened by a debt of approximately $45 million. Unfavorable seasonal conditions and pandemic-related closures in recent years exacerbated the situation, leading to a ballooning debt of $81.6 million. Among the creditors are about 15,000 ski pass holders owed $44 million.
Prime Minister Chris Hipkins acknowledged the ski season’s vital role in the central North Island economy, emphasizing the need for the Government’s involvement in discussions about its continuity. Recognizing the potential responsibility of covering expenses should the ski fields collapse, Hipkins affirmed the Government’s interest in finding a way forward.
However, the Act Party leader, David Seymour, expressed concern over potential political favors or business handouts. While the situation unfolds, stakeholders and enthusiasts eagerly await the resolution of these financial challenges, hoping for a successful ski season on Mt Ruapehu.
