TX-based Oak Hill Capital Partners signed an agreement
to purchase $150M of convertible preferred stock in ME-based
American Skiing Co. Proceeds from the sale will be used to
reduce American Skiing's debt and provide the company
capital to continue to pursue its growth plans, including
development of resort villages. Oak Hill's investment
represents a 48.5% stake in the company (ASC). In Portland,
Dean Lunt reports that American Skiing "will use" $110M to
reduce debt, which is "around" $400M, and "will inject" $30M
"into its real estate division." American Skiing President
& CEO Leslie Otten, whose ownership stake in the company
will be reduced from more than 51% to "about" 26% as a
result of the sale, said, "The timing was perfect and it
assures the company of a much stronger capital structure in
the future, a balance sheet that can weather any kind of
storm, and it allows us to move ahead with more ease in real
estate development." Otten added that he didn't "expect"
Oak Hill to "be involved in management at all," but it will
appoint four members to the newly organized and expanded 11-
member board, while Otten will appoint four and three will
be appointed jointly (Portland (ME) PRESS-HERALD, 7/13).
Shares of American Skiing closed in NYSE trading yesterday
at $4.9375, down 6.25 cents (WALL STREET JOURNAL, 7/13).
