Arctic rescue snares LLA

THE rescue plan mounted by James Packer for the debt-laden ski-fields and aquarium operator Living and Leisure Australia has given the billionaire's recently launched private equity vehicle a shareholding just short of majority control. In a de facto takeover of the group, Arctic Capital was left with 49.3 per cent of LLA following a rights issue that raised $100 million for the company - which runs the Mount Hotham and Falls Creek snowfields. Arctic's underwriting partners in the .

By InvestSMART · 7 Aug 2008

By InvestSMART ·
7 Aug 2008

In a de facto takeover of the group, Arctic Capital was left with 49.3 per cent of LLA following a rights issue that raised $100 million for the company - which runs the Mount Hotham and Falls Creek snowfields.

Arctic's underwriting partners in the recapitalisation move, Morgan Stanley and a Goldman Sachs Asian investment fund, Triumph Investments, have taken stakes of 19.9 per cent and 19.4 per cent respectively.

The Packer-led consortium now owns 88 per cent of the group after the issue of 2.5 billion new shares.

Arctic Capital, which is wholly owned by Mr Packer's Consolidated Press Holdings, has also secured management rights over LLA's businesses which include various aquariums in Australia and overseas and tree-top walkway attractions.

The company yesterday signed a deal with LLA's former parent, the troubled Octaviar group - formerly known as MFS - to take control of the responsible entity which runs the leisure operator.

The other components of the recapitalisation repays LLA's banker, National Australia Bank, the $200 million it is owed, with new lending facilities provided by ANZ, and the company has also reduced its financial dependency on Octaviar's Premium Income Fund.

The success of the financial revamp secures LLA's future after six months of turmoil brought on by Octaviar's own debt troubles, which were sparked by the global credit crisis.

In doing so, it has given Mr Packer control of three of the country's main ski resorts, adding Mount Hotham and Falls Creek to Perisher Blue in NSW, which is 75 per cent owned by Consolidated Press.

The Australian Competition and Consumer Commission recently raised no objections to the move, saying the country's other smaller snowfields and New Zealand's ski industry would be more than able competitors.

The Hong Kong-based Arctic has insisted throughout the three-month rescue process that its major interest is LLA's ownership and experience in running aquariums, which it says can be exported to Asian markets, in particular China.

It is understood that Arctic and its partners have no plans to take LLA private, despite them being just short of the 90 per cent level that would allow them to compulsorily purchase the outstanding stock.

LLA's shares yesterday closed slightly up at 4.1c, just above the rights issue price.