Fortress fighting to keep two of its companies afloat - FT

Fri Oct 17, 2008 12:37am EDT

Oct 17 (Reuters) - Fortress Investment Group LLC (FIG.N), one of the few publicly traded managers of private equity and hedge funds, is taking action to keep two of its companies afloat, the Financial Times said, quoting people familiar with the situation.

Fortress is struggling to preserve the value of its investments in Intrawest, a ski resort company based in Canada that has $1.68 billion in debt due on October 23, and Gagfah, a German residential real estate group that is seeking to raise additional equity to comply with the terms of its debt, the paper reported on its Website.

People familiar with Fortress say there is a low probability Intrawest will file for Chapter 11 bankruptcy protection, the Financial Times said.

The paper quoted a portion of a letter sent to investors on October 3 which said, "We are engaged in constructive discussions with the balance of the lending group."

Fortress was not immediately available for comment.

New York-based Fortress controls Intrawest via a $1.37 billion equity stake. With Intrawest's debt trading at less than 70 cents on the dollar, Fortress has approached potential and existing lenders to discuss a refinancing involving $1.4 billion in senior debt, the Financial Times reported.

It is putting in an additional $100 million of capital to preserve its equity's value, but talks will be tricky since any member of the lending group can veto a deal, the paper said.

Founded in 1998, Fortress went public in February 2007 at $18.50 per share in the first initial public offering by a U.S. private equity and hedge fund manager. Its shares closed up 4 percent at $5.50 on Thursday. (Reporting by Shradhha Sharma in Bangalore; Editing by Lincoln Feast)

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