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PARK CITY, UT-American Ski Resort Co. has agreed to sell its last major asset, the Canyons, for $100 million plus the assumption of $600,000 in debt. The locally based company says the buyer is Talisker Corp, which owns other significant assets in Park City. Talisker has made a nonrefundable $10-million deposit.

Located in Park City, the Canyons is Utah’s largest winter resort, with 17 lifts across eight mountain peaks that provide access to 3,700 skiable acres (fourth largest in the nation). Lodging includes Grand Summit Hotel, Sundial Lodge and several other options.

Talisker Corp. is a global real estate development firm based in Toronto. In 2003, Talisker acquired United Park City Mines, an NYSE-listed company with significant assets in Park City. This past February, the company announced a 10,000-acre luxury residential development in the city.

The transaction is expected to close on or before Sept. 29. The Purchase Agreement may be terminated if the transaction is not consummated by Dec. 31. Talisker may extend the closing deadline to May 31, 2008 under certain (currently undisclosed) circumstances.

Oak Hill Capital Partners LP and related entities owns all of American Ski Resort’s preferred stock, approximately 6% of its Common Stock, and control a majority of American Ski Resort’s board of directors. Leslie B. Otten holds of all of American Ski Resort’s Class A Common Stock and about 4% of the Common Stock.

American Ski Resort says it decided to liquidate after the sale of a few of its assets generated additional buyer interest. American Ski Resort Co. president/CEO B.J. Fair says the sale of the resort “will complete a necessary step for American Skiing Co. to wind down its affairs.” A spokesperson declined to provide detail at this time on the specific assets involved in the sale.

According to SEC filings, the Canyons leases approximately 2,100 acres, including most of the base area and a substantial portion of its skiable terrain, under a lease from Wolf Mountain Resorts. The initial term of this lease is 50 years expiring July 2047. The lease provides an option to purchase those portions of the leased property that are intended for residential or commercial development.

The Canyons also leases approximately 807 acres, which constitutes the area for a planned mid-mountain village and a substantial portion of its skiable terrain, from the State of Utah School and Institutional Trust Land Administration. That lease ends in 2078 and provides an option to purchase those portions of the mid-mountain village area that are intended for real estate development at a cost of 25% of their fair market value on an undeveloped basis. Finally, the Canyons also holds certain rights for ski terrain across land owned by the Osguthorpe family under a long-term agreement with a term expiring on Aug. 14, 2024.

American Ski Resort’s resort revenues are generated from lift ticket sales, food and beverage sales, retail sales including ski rentals, repairs and ski lessons, and lodging and property management. It owns and operates the Grand Summit Hotel at Canyons as well as Sundial Lodge, a whole ownership condominium-hotel.

American Ski Resort’s development activities at the Canyons in Utah are governed by permits issued pursuant to a development agreement with local authorities. The current master development plan for the Canyons, approved in 1999, includes entitlements for approximately five million sf of development.

The development agreement requires the company to achieve certain performance benchmarks in order to remain in compliance with the development Agreement and obtain additional permits. In particular, the development agreement required that the company complete a golf course at the Canyons by November 2002. The golf course was not completed, and local authorities have advised the company that the situation potentially constitutes a default under the development agreement.

With regard to the legal dispute with Wolf Mountain Resorts, Utah District Court has granted American Ski Resort a temporary restraining order and amended a previous injunction to prohibit Wolf from terminating the lease until the Court finds that American Ski Resort has breached the lease and that Wolf is entitled to terminate the lease as a result.

Termination of the lease would significantly reduce the value of American Ski Resort’s operation at the Canyons, and would materially curtail, if not completely eliminate, its ability to obtain recurring revenues from those assets. In the event of termination of the lease, Wolf may have certain rights to repurchase for fair market value certain of American Ski Resort’s assets which are used in conjunction with its operation of the Canyons.

Wolf’s right to terminate the lease is subject to certain rights of cure and foreclosure in favor of American Ski Resort’s lenders. In the event of a timely cure by one or more of those lenders, such lenders are entitled to step into American Ski Resort’s shoes under the lease.

Neither Talisker nor American Ski Resort could be reached for comment. Oak Hill Capital Partners also was not immediately available for comment on Tuesday. American Ski Resort says the sale to Talisker is not expected to result in any change in the status of currently pending litigation.

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