A letter to shareholders of the Treble Cone Ski Area has revealed the company had "a very disappointing year" with a trading loss of $486,000.
Its bank had rejected a request for an additional temporary loan facility but had said it would provide temporary working capital to pay wages and creditors provided shareholders contributed additional equity.
In the letter, leaked to the Otago Daily Times, chairman Nat Craig said there was a reasonable chance of a sale of the company's assets by the end of the financial year.
The letter also made reference to the company being unable to pay a dividend in the "forseeable future".
Mr Craig said the number of skier-days was 13,000 below the budgeted 87,000 for 2008 - the second lowest number the field had experienced in the past six years.
However, the biggest impact on the company was unforeseen capital expenditure items totalling about $1.5 million, such as a sewerage system upgrade, the Saddle Culvert rebuild, and a new generator motor.
"These items were ones which we had no choice with, as they are essential in keeping the mountain operational."
All other capital expenditure items had been cancelled and only those required to remain operational in 2009 had been approved by the board, he said.
"It is extremely unfortunate that we find ourselves requiring $2 million additional funding at a time when lenders are reluctant to extend facilities, and the economy is in its worst position since we acquired the business."
Mr Craig said in order to accommodate the additional funding, the company required a temporary facility of $750,000 from January to July 2009.
"Our request for this temporary facility from the National Bank has been rejected by Wellington. The bank has limited our facility to $4 million and we are currently at that limit."
However, the bank indicated it would provide a temporary working capital facility - which was needed immediately to pay wages and creditors - provided there was an equity injection from shareholders, he said.
As a result, the board had decided to issue 20 million shares at 5c per share to raise additional capital required. Shareholders who did not take up their rights could face "a substantial capital loss".
Mr Craig said approaches had been made to acquire the operating assets of the business and discussions were taking place.
"These are at an early stage but there is a reasonable chance that a sale transaction could take place before the end of the financial year."
