Transmontagne goes bust

It is possible to dismiss the closure of the ski resorts of Abondance and Céüze as isolated incidents. Too small to survive in today’s climate. However news that the Transmontagne group has stopped paying bills has been like a cold July shower for businesses and workers in the Alps. Transmontagne has become a specialist in managing mid-mountain ski domains including the 1968 Olympic resort of Chamrousse as well as Superdévoluy, la Joue du Loup, le Queyras, Pra-Loup, Valfréjus, le Lioran and Bardonecchia. In addition to running ski lifts the group has interests in property and shops and is developing resorts in China and Eastern Europe. However it is best known for running the spectacular Dubaï snowdome.

chamrousse bachat boulou
New Transmontagne apartments at Chamrousse

Today Transmontagne will ask Lyon commercial court for the equivalent of Chapter 11 bankruptcy protection. The Lyon court has a range of choices. It can allow Transmontagne to continue operating for a fixed time but with its debts frozen in an attempt to restructure the business or find new investors, it can allow a direct takeover or it can appoint a receiver to sell off the assets. The news has come as a shock to Transmontagne’s 300 employees and 1700 season workers who have already experienced a difficult winter of short time working. Some workers have not been paid for two months. The cold and wet start to the summer has not helped mountain resorts which offer activities such as open air swimming pools, tennis, mountain biking and walking. Experts have blamed Transmontagnes problems on rapid growth, the losses are rumoured to be in the 7-9 million euro range. Philippe Gausset, the managing director, said the lack of snow during the winter was directly responsible for the group’s current financial difficulties. The group had just received a cash injection of 600,000 euros from the Conseil Général des Hautes Alpes. Jean-Claude Catala, in charge of the Transmontagne file, said the news of the financial difficulties had come as a surprise to him.

Amongst Transmontagne’s shareholders is the Caisse des Dépôts et Consignations (CdC), a state run bank which also owns a stake in the Compagnie des Alpes (CdA). It is unlikely that the CdA will be interested in running Transmontagne’s ski areas. The CdA has concentrated on high altitude skiing and is already digesting the acquisition of a 60% stake in the Société des Téléphériques de Val d Isère (STVI) as well as minority shareholdings of 20% in Morzine-Avoriaz (SERMA), Valmorel (DSV) and La Rosière (DSR). The local communities of the Queyras say that they will take control of the Société d’Economie Mixte (SEM) - a type of public company from Transmontagne. The group had an 18 year franchise on the resort’s ski lifts and had been unteraking a heavy investment programme including two new chairlifts and snow making at Ceillac and les Abriès. Experts said that the six seater high speed chair lifts, built by Poma, were too large for the ski domains. Although the ski area has a rustic charm it is isolated, the nearest town, Gap is over an hour’s drive. The area had further plans to restructure with new chair lifts at Molines and St Veran as well as the possible closure of the Aiguilles and Vielle Ville lifts. The investments are largely funded by Transmontagne, the French State and European Community.

Further Information
It’s not climate change, stupid!
Abondance abandons skiing
Val d’Isere for sale

Posted by davidof on Tuesday, 10 July, 2007 at 10:45 AM

I’ve just checked and the Lyon court has placed the 18 holding companies that form the TM group in receivership. This period will last six months and this period can be renewed. Normally employees and the taxman are preferential creditors. It is possible that TM will find new funding in this period but they would have to address the problems that lead to the current situation.

Posted by  on  Tuesday, 10 July, 2007  at 06:09 PM

This is our review of the Transmontagne Plateau d’Arselle / Bachat Bouloud development at Chamrousse:

From emails we have been getting it seems that TM have not been paying rents recently and this is causing leaseback owners some concern.

Posted by davidof on  Wednesday, 11 July, 2007  at 09:00 AM

Same situation down in Dévoluy according to the regional Dauphine Libere newspaper. The commune hasn’t seen 300 000 €, it’s share of lift pass sales due from Transmontagne. The town has also not been paid for snowmaking over the winter. Rents have not been paid to leaseback owners and season workers have not been paid. Transmontagne was also due to replace ski lifts in the resort. If you’ve skied in Super Dévoluy you will know it was the kingdom of the drag lift. The main investment is a telemix lift (mixture of chairs and cabins) which should take people to higher altitude skiing when conditions are poor at resort level.

The mayor seems very calm about everything but the fact that control was ceeded to Transmontagne in the first place means that there were problems with the resort running the domain directly.

TM have also just signed a deal to run the Monts du Jura ski areas (Mijoux-La Faucille, Crozet-lelex, Menthières et La Vattay). They were promising 60 million euros investment over 20 years. Looks like that deal’s off.

Posted by davidof on  Wednesday, 11 July, 2007  at 09:18 AM

Some comments on winter. Chamrousse’s turnover was down just -2%. We visited the area a number of times over the course of the winter from December to April. To be honest, given the very poor start to the winter ski conditions were not that bad during the season although one can imagine that there were extraordinary charges for piste preperation and snow making (although this is limited at Chamrousse).

The Southern Alps actually increased turnover by 1% last winter and it should also be born in mind that many low-lying resorts outside of the Transmontagne group didn’t open. This does seem to be more a case of cash flow brough on by overly ambitous growth plans. Transmontagne lost 8.2 million euros over the last 12 months for a turnover of 63.5million euros.

Posted by davidof on  Wednesday, 11 July, 2007  at 02:23 PM

The Commercial Court in Lyon will reconvene on the 4th of September to see how things have evolved with Transmontagne. Financial experts are currently examining the accounts. The management have talked about a new investor and of the contract with the Jura being a way out although with very poor snow in the Jura last season this would appear to increase the group’s difficulties.

There is a meeting of the representatives of Dévoluy, Queyras and Praloup ski resorts with the group tomorrow afternoon. The main item for discussion is the fate of employees and the running of ski lifts for next season.

If you are owed money by Transmontagne – for example a leaseholder. You need to get in touch with the receiver by registered letter to let them know the sums owed and why and provide documentary evidence of this.

Posted by davidof on  Wednesday, 11 July, 2007  at 09:45 PM
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