Packer in $90m Victorian ski fields deal

The Australian reports that James Packer has positioned himself to become Australia’s largest alpine resorts owner by taking control of the cream of the Victorian ski fields. 

Mr Packer’s Mt Hotham and Falls Creeks grab is through an agreement to underwrite a $90 million rights offer for suspended MFS offshoot Living & Leisure Australia Group.

That deal is through his recently created Arctic Capital Ltd, a $100 million-plus pan-Asian private equity fund that has attracted wealthy individuals wanting to co-invest with Mr Packer in Asian ventures.

Hong Kong-based Arctic, a subsidiary of Mr Packer’s Consolidated Press Holdings group, has already taken a 26 per cent stake in a Philippine bank and a 15 per cent interest in a Singapore-based shipping company.

As well as control of Mt Hotham and Falls Creek, the conditional Living & Leisure deal, which includes the refinancing of LLA debt, would give Mr Packer control of five aquariums, three of which are in Asia and are considered to have the biggest growth potential in the LLA portfolio. LLA owns the Melbourne Aquarium, Underwater World on the Sunshine Coast and aquariums in Thailand, Korea and China.

Mr Packer already has substantial NSW ski fields holdings at Perisher and Smiggins, and control of LLA would make him Australia’s largest ski fields owner, ahead of Rino Grollo, who controls most of Victoria’s Mt Buller.

But with tight development limits in NSW alpine villages, which are in a national park, the real money is in Victoria, where the former MFS and its property development partner, the Ray Group, had $500 million redevelopment plans for Mt Hotham.

The Ray Group, which has not been affected by the MFS collapse, has already completed a small number of property developments at Dinner Plain, which is near Mt Hotham.

Those sales include about $50 million worth of home sites.

But their biggest plans involved a luxury Mt Hotham village development known as Bale, where luxury homes will sell from $2.25 million.

MFS paid $80 million for its Hotham and Falls Creek interests in 2004, but three patchy snow seasons kept the crowds away until 2007, which was one of the best seasons in a decade.

The LLA recapitalisation proposal includes Arctic agreeing to acquire $63 million of Living & Leisure’s unsecured debt from the Octaviar Premium Income Fund, which until this week was known as the MFS Premium Income Fund.

While the beleaguered MFS group, now known as Octaviar, and LLA remain in a trading halt that has lasted almost four months, on Thursday the Premium Income Fund became the first of the former MFS offshoots to return to the market.

In a statement yesterday, LLA said it was a condition of Arctic’s underwriting of the rights offer that, subject to satisfactory due diligence, it would acquire LLA from Octaviar “on terms agreeable to Arctic”.

The LLA portfolio also includes tree-top walk businesses in the Otway Ranges in Victoria and Knight’s Hill in NSW’s Illawarra.

According to LLA independent chair Julanne Shearer, Arctic’s agreement to underwrite the rights offer was conditional on the support of National Australia Bank.

by The Mole