In a bid to fend off foreclosure, hedge fund Fortress is offering cash to lenders of Intrawest, the resort company that owns venues for the 2010 Winter Olympics, sources told The Post.
If creditors agree, it would give Wesley Edens’ firm more than two years to turn Intrawest around.
At the same time, Fortress says it is negotiating with the Canadian government, which it says promised to make it whole for the time Whistler/Blackcomb mountain is used for the Olympics. Intrawest is trying to get roughly $90 million, and wants to be paid before the Games start on Feb. 12, a source said.
If it does not get paid, Fortress plans to start legal proceedings, the source added. It is unclear if that could disrupt the Winter Olympics.
Intrawest, which Fortress bought in a $2.75 billion leveraged buyout in 2006, is late on a $524 million debt payment.
The Lehman Brothers-led lending group has set a deadline of Feb. 19 — smack in the middle of the Vancouver Games — to foreclose on Intrawest if it does not get more in a restructuring.
Fortress has in recent days made some concessions, including offering the lenders cash — though significantly less than $500 million — on top of proposing to pay higher interest rates, a source said.
The money would come from Fortress and be beyond the proceeds Intrawest generates from the sale of British Columbia’s Panorama Resort, which was announced this week.
In return, Fortress wants the principal to be pushed out for more than two years, while it maintains almost complete ownership of Intrawest, which includes Vermont’s Stratton Mountain.
Still, other investors have approached the lenders’ advisers and expressed interest in buying pieces of Intrawest, a second source said. Repossessing Intrawest and selling it off might be a better deal for them than reaching an agreement with Fortress.
Still, sources close to both sides said they believe Fortress and the lenders will likely reach a deal.
If Fortress pulls it off, it would be similar to its reported plan to spend $125 million from its fund to pay down debt at railroad operator Florida East Coast Industries to keep it from being repossessed.
Fortress declined comment.