The aim of the Edelweiss Club is to promote skiing in the Crans-Montana region. In the light of the current situation, that go can only be achieved by supporting the local lifts company : CMA.

The current CMA is the result of the merger of 5 independent companies. None of these companies were in particularly good health and the merger has not improved things. This is due mostly to bad strategic choices and mismanagement. 

At the beginning of the 2001/2002 season, CMA was practically bankrupt and the local authorities as well as the creditors banks contributed about SFR 20 MM to the ailing group.

The new funds made it possible to the management team (including a Board of Directors which work pro-bono) to operate the facilities within acceptable standards. The new team has also made an in-depth inventory which has revealed serious faults requiring immediate and expensive attention.

A refurbishing programme amounting to SFR 60 MM over a 10-year period will be necessary to ensure an acceptable degree of performance of the lifts.

This plan can easily be financed internally after an initial capital contribution of SFR 15 MM.

This sum must be raised at the next offering which is expected towards the end of the year or early 2003.

If this plan does not materialize, what are the alternatives : 2 disasters!

The first consist in a cut back of the starting point of the lifts from 5 to 3 or even 2. Simultaneously there would be a substantial reduction of the ski park.

Thus, cost will be cut and maintenance deferred with a somewhat reduced turnover (are the ski passes going to undergo another substantial increase?).

The second alternative is to allow one or several industrial operators to take a substantial stake in the CMA. This "partner" would help CMA by increasing substantially the turnover. In this respect, Crans-Montana represents a formidable opportunity with 30% of skiers and a capacity utilization below 60%. This second alternative will inevitably lead to an increase use of the lifts and as an immediate and direct consequence queues and a deterioration of the tourist population in the area.

In order to participate in our Club, one must clearly prefer the management plan to the alternatives, which are bound to affect adversely the resort we love so much.

The initial contribution will be fixed by the committee soon and will be accumulated in a fund which will take a stake in the CMA. This will allow the company to undertake a capital raising exercise under good hospices, and negotiate with the banking partners and the local partners a restructuring of the capital.

In a few words, this is the current situation of CMA and the solution which Crans-Montana lovers would like to implement.

Finally, don't forget that the local banks (UBS, CS et BCV) are placing serious pressure for money to be raised shortly and they have clearly stated that they would not hesitate pushing CMA into bankruptcy or to push the company into the arms of a more or less friendly suitor.

Any of you having funds under management with them should think about this!

The Club will also be a meeting place, a bar-restaurant, and the sponsor of all sort of activities which Crans-Montana lovers will found attractive.
 
 

The Secretary