Ruapheu Goes Broke
Ruapehu Alpine Lifts (RAL), the operator of the Whakapapa and Tūroa ski fields, has been put into liquidation. The decision was made by creditors after they voted down a proposal to save the business operations of the North Island's two main skifields.
RAL went into voluntary administration in October 2022 after the combined effects of Covid-19 lockdowns and border closures, and a poor snow season left it $45m in debt. The voluntary administrators needed $9m to survive until the 2023 winter season. They had put together a $4m rescue package, from the Government and ANZ, but that money was due to run out by Christmas.
The creditors were presented with three options to salvage the commercial operations of the ski fields. The first option was to retain the current company structure, but this was rejected because it would have required RAL to raise more money, which the creditors were unwilling to do.
The second option was to sell the assets of RAL to two private companies, Whakapapa Holdings and Pure Tūroa. This option was also rejected, because the creditors were concerned that the new owners would not be able to operate the ski fields successfully.
The third option was to return RAL to the directors' control, which would lead to the company being liquidated. This option was the one that was ultimately chosen by the creditors.
The liquidation of RAL leaves the future of the Whakapapa and Tūroa ski fields uncertain. The ski fields employ approximately 196 staff and are a major economic driver for the Ruapehu district.
Ruapehu District Mayor Weston Kirton said the liquidation was a "disappointment all around". He said it created a lot of uncertainty for the community, which expected the ski season to be running in due course.
The Government has said it is "disappointed" by the liquidation of RAL and is working with the liquidators to explore options for the future of the ski fields.
It is unclear what will happen to the Whakapapa and Tūroa ski fields next. The liquidators will need to assess the assets and liabilities of RAL before making any decisions. It is possible that the ski fields could be sold to another operator, or that they could be closed permanently.
The liquidation of RAL is a major blow to the New Zealand ski industry. The Whakapapa and Tūroa ski fields are the country's two largest, and they attract millions of visitors each year. The liquidation also raises questions about the future of skiing in New Zealand.
The liquidators, John Fisk and Richard Nacey of PwC, are now responsible for selling the assets of RAL. They have said that they are hopeful that the ski fields will be able to continue operating, but it is too early to say for sure what the future holds.
Ruapehu mayor Weston Kirton said he warmly welcomes the announcement that the Government will provide up to $5 million to the liquidators of Ruapehu Alpine Lifts (RAL) to ensure the mountain’s 2023 ski season can go ahead.
“This decision marks a significant milestone in the ongoing efforts to secure the future of skiing on Mt Ruapehu and its contribution to the regional economy,” he said.
“With the failure of the watershed meeting of RAL creditors on Tuesday last week to support either the Whakapapa Holdings Limited or Pure Tūroa Limited bids allowing time for liquidators to decide on the best possible purchaser or purchasers of the business and its assets was the best possible outcome.
The news that there is a new proposal from Te Ariki Tā Tumu Te Heuheu on behalf of Tūwharetoa to take over the ski operations on the mountain is welcomed.
I would like to express my sincere appreciation to Government and Regional Development Minister Kiri Allan for recognizing the crucial role that the Ruapehu ski industry plays in the central North Island's economy.
This announcement will come as a tremendous relief to the Ruapehu communities with the ski industry contributing approximately one-tenth of the regional GDP, amounting to $100 million per year.
The decision to support the 2023 ski season will ensure job security for the workers on the mountain and provide much needed certainty for businesses that rely on the ski industry,” he said.
Mayor Kirton noted that getting to this point has been an emotional and trying time for everyone involved.
“I want to express my gratitude to the resilient and supportive Mt Ruapehu communities. I understand the stress and uncertainty this process has brought upon you. Moving forward, I call upon all stakeholders to support the liquidator to choose the best operator or operators who can ensure the long-term success of the Mt Ruapehu ski industry,” he said.
In the meantime, the ski fields are closed for the season. It is unclear when they will be able to reopen.
