In January 2020 ADM Capital exited from Project Skyride, a 2018 secured loan financing a Shanghai based private equity firm’s acquisition of Grouse Mountain, an iconic ski resort 15 minutes north of Vancouver, Canada.
At disbursement, the USD43m three-year ADM Capital loan had an estimated 2.2x collateral coverage provided by a 100% first lien share pledge of the acquisition entity and a second lien share pledge and charge on the underlying assets. In addition, ADM Capital had observer rights on the Board of Directors, a veto right at the borrower entity, cash monitoring rights and strong financial covenants.
The loan was structured with a cash coupon, PIK and upside tied to gains achieved by the borrower. Over the 27 months the loan was outstanding, the borrower, focusing on converting the Mountain to a four seasons resort, was able to substantially increase top line revenue and EBITDA.
The timely sale of the asset resulted in ADM Capital achieving a gross IRR of 15.8% and a cash on cash multiple of 1.36x over the holding period.