Cardrona sale boundary complication

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Part of popular Cardrona skifield is on neighbouring farmland – complicating its purchase by a Queenstown-based tourism operator.
 
Due diligence carried out during the ongoing sales process has confirmed some of the upper ski basin belongs to Glencoe Station’s pastoral lease, Mountain Scene can reveal. 

The boundary surprise comes as the sales process seemingly drags on with little sign of progress. 

Many observers had expected the purchase to be concluded by the end of June, soon after the skifield – between Queenstown and Wanaka – opened for business this winter. 

Australian-based Vealls Ltd, Cardrona Alpine Resort’s owner since 1990, announced Real Journeys as the preferred bidder for the skifield in May. Real Journeys, a prominent local tourism player, owns and operates Queenstown’s historic Earnslaw steamship and many Milford and Doubtful Sound coaches and cruise boats.

Early this month the sale was overwhelmingly approved by Vealls shareholders at a general meeting in Melbourne. 

Vealls company secretary Duncan Vealls says Cardrona’s encroachment onto Glencoe Station only became apparent during the recent due diligence process: “It’s just one of those things – they’re old surveys.” 

Vealls says he regularly talks to Glencoe owner, Queenstown developer John Darby, and doesn’t expect the boundary matter to delay the sale. 

Darby says: “We have been approached by both the vendor and the prospective purchaser and we fully expect the matter to be resolved in the near future.” 

A Real Journeys spokesperson declined to comment and referred to an earlier statement by chief executive Richard Lauder: “The sale remains an ongoing process and subject to confidentiality agreements for the time being.”

Meanwhile, former Cardrona owner John Lee says he’s not surprised to find some of his former skifield occupies Glencoe land. 

Vealls he adds, didn’t appear to do the same level of due diligence when it bought Cardrona from him that Real Journeys is now doing. 

“[The parties] have got to come to some arrangement, I guess – probably financial.” 

Vealls decided early this year to sell Cardrona because it’s concentrating all its business interests in Singapore. 

Despite the company ploughing substantial money into upgrading the skifield, it’s remained a profitable asset. 

According to its half-year report to December 31, 2012, the company’s total revenue was $15.3 million, most of which came from its New Zealand subsidiaries – “in particular the Cardrona Skifield operation”. 

It’s understood Cardrona’s other bidders were Queenstown-based Skyline Enterprises, rival skifield operator NZSki and London-based giant Merlins Entertainment Group.