Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 28, 2015, Winnipeg, Manitoba C M Y K PAGE B6 BUSINESS CITY EDITOR: SHANE MINKIN 204- 697- 7292 I CITY. DESK@ FREEPRESS. MB. CA I WINNIPEGFREEPRESS. COM WEDNESDAY, JANUARY 28, 2015 B 6 W INNIPEGGERS looking to escape to the sun and sand boosted passenger numbers for the Winnipeg Airports Authority for the last quarter of 2014. The WAA reported Tuesday 892,563 passengers passed through the terminal building from October through December, a 6.9 per cent increase from the 835,131 passengers during the same three- month period a year earlier. " It was a very good quarter. Trafficwise, things went extremely well," said Barry Rempel, the WAA's president and CEO. Carriers have responded to some pent- up demand by adding additional capacity. In some cases, people are coming to town on business, he said, while others are heading to the tropics. During the quarter, WestJet added direct service to Fort Lauderdale, Fla., while Sunwing began weekly service to Orlando. It also started booking flights for Ixtapa, Mexico, which began in January. WestJet spokesman Robert Palmer said it keeps a " pretty close watch" on where people travel. " If there's a substantial number of people connecting to Florida via Toronto, it suggests there may be demand for a non- stop flight from Winnipeg," he said. Palmer said that strategy was in place a year ago when it reintroduced twice- daily flights to both Saskatoon and Regina. For the previous five years, WestJet passengers would have to fly to Alberta first and connect to Saskatchewan. " Any Winnipegger could tell you how inconvenient it was to back- haul ( to Regina and Saskatoon)," he said. Travellers will notice some construction in the 3 � - year- old terminal building, highlighted by a new Plaza Premium lounge, a pay- per- use amenity that will give weary travellers access to food, beverages, telephones, and Wi- Fi or just some peace and quiet. Work is also being done on two new restaurants that have just been added. Urban Crave and Prairie Bistro have taken the place of the TGIFriday's locations just past security and in the U. S. departure lounge, respectively. The physical layout of both restaurants will be upgraded during the first quarter. " We needed to freshen up ( the restaurants). TGIFriday's sales per square foot weren't meeting targets," Rempel said. " We're trying to provide something that people actually want. The measure of that is always sales. The brand wasn't quite what we anticipated when we brought them up." Rempel said he didn't have the exact numbers, but the WAA's research shows growth has slowed in the number of Winnipeggers heading to Grand Forks by car to catch a flight there. " We're seeing roughly the same number of people ( per quarter) who are going down," he said. The WAA's revenue for the quarter was $ 26.4 million, up from $ 23 million a year ago, while earnings before interest, depreciation and taxes were $ 11.1 million, compared with $ 10.6 million for the same three months a year ago. geoff. kirbyson@ freepress. mb. ca JUST months away from completing a six- year, $ 20- million renovation and upgrade, Winnipeg's largest hotel - the Delta Winnipeg - is about to also become affiliated with one of the world's largest hotel chains. U. S.- based Marriott International Inc. announced Tuesday it has signed a deal to acquire the Delta hotel brand from B. C. Investment Management Corp. for $ 168 million. Under the terms of the agreement, the Maryland- based hotel chain will take over the management and franchise operations for the 38 Delta hotels and resorts, and their 10,000 rooms, in Canada. Marriott, which has more than 4,100 hotels around the world, said in a statement the acquisition will boost its operations in Canada to more than 120 hotels and 27,000 rooms. It noted affiliates of B. C. Investment Management own 13 of the Delta hotels and will sign new 30- year management agreements with Marriott. Third parties own the other 25 Delta hotels, including 15 that are managed by Delta and 10 that are franchised. The Delta Winnipeg is one of the 15 managed by Delta, and that arrangement is expected to continue. Although the Canadian hotels are expected to keep the Delta name, Marriott said it will be integrating them into its systems, its website and its customer loyalty program. It said it expects to close the deal in the second quarter, after getting approvals from Canadian competition authorities and certain other consents. Tuesday's announcement comes as the Delta Winnipeg nears completion of a six- year renovation project, which included a complete makeover and modernization of both the interior and exterior of the St. Mary Avenue property. It also included the construction of an overhead skywalk connecting the hotel to the city's downtown skywalk system. " All of our rooms are done, and all of our meeting space is done," general manager Helen Halliday said in an interview. The lobby and public spaces also received a complete makeover, and the revamped Blaze Restaurant and Lounge also recently reopened, she added. The only things left to finish are upgrades to the hotel's health- club area, which includes an indoor pool and gym, and to the canopy above the hotel's front entrance. Halliday said the health- club upgrades should be completed by the end of the first quarter, and the canopy upgrades will be done this summer. " We're just making it ( the front canopy) complementary to the inside," she explained. " It got too late in the year ( last fall) to do it right, so we just said, ' Let's wait until the summer when it's prime for doing it and getting it right,' because it's kind of the bow on the package." Once all the work is completed, the hotel will be positioned to take full advantage of the new convention business that's expected to come to Winnipeg once the $ 180- million expansion of the neighbouring RBC Convention Centre is completed in early 2016. B. C. Investment Management manages investments for public- sector pension funds as well as publicly administered trust funds and government operating funds. - with files from The Canadian Press murray. mcneill@ freepress. mb. ca THE TSX said Tuesday shares of San Gold Corp. will be delisted by the end of February as the company continues to operate its gold mine in Bissett under creditor protection. Late last week, a Manitoba court granted San Gold an extension to the middle of March to file a formal proposal to creditors and stakeholders. Company management is optimistic its current production process puts it on a path toward operating profitably by March. But the company - under protection of the Bankruptcy and Insolvency Act with Gord Neudorf of MNP acting as the proposal monitor - desperately needs to find new financing. In the next few days, it is expected to retain financial advisers to run a sales and investor solicitation process ( SISP) to find new investors, a joint venture partner or sell the company outright. The company currently has a creditor list amounting to close to $ 95 million, including close to $ 30 million in secured debt to a New York financier called Beechwood Re, which is also subsidizing current operations. As well, there is $ 50 million in unsecured convertible debentures. It has a plant and equipment with a book value of $ 64.8 million. A formal creditor- claim process will take place when the company files its proposal plan. The initial notice of intention to file a proposal was made Dec. 22. There has been a stay of proceedings on the company since then, and ongoing suppliers are being paid cash on delivery. San Gold has booked close to $ 200 million in losses in the last two years. When a proposed merger with Kerr Mines Inc. - another small Canadian mining company - fell apart in mid- December, San Gold was out of cash and needed emergency funding from its secured creditor. Company CEO Greg Gibson said in an interview Tuesday the whole creditor- protection process is designed to protect all the stakeholders. " Now that everything is in place, and the loan has been approved by the court... we are now working as a company to save the shareholders and keep them in play... and try to protect unsecured creditors as best we can," said Gibson. Gibson came on as CEO last year to try to turn operations around after the company's failed efforts to become a much larger producer than the operations would allow it to be. " One of the major problems with San Gold right from the beginning was that ( former) management wanted it to be much bigger than what it could ( practically support from the mining assets it had)," Gibson said. " They attempted to build this great big mine, but the carrying costs are huge right now." Since San Gold was formed in 2009, it has raised more than $ 400 million in equity. But while the company came close to targeted attempts to produce as much as 100,000 ounces of gold per year, it could never make any money doing that. Under Gibson, the current mine plan is designed to produce about half that much gold, but it could also generate an operating profit at that rate. " Right now, with the drilling done since last spring, it's allowed us to define a couple of ore bodies, which makes me comfortable to say that is what the mine will sustain," said Gibson. He said under the more modest current production plan that is targeted at higher- grade ore bodies, the mine will become cash- flow positive in March. " That's a pretty big statement, because after about a half- billion dollars invested, it has not had a profitable quarter since inception six years ago," he said. The company's workforce of more than 300 people are on the job and wages are being paid. About 40 per cent of its workforce is from the Bissett region, and it has a monthly payroll of about $ 3.3 million. The workforce is non- unionized. An industry source said there is some optimism the current plan will yield interest from prospective investors. " The fact that the current secured creditors are committed to the process should be seen as a good sign," the industry source said. Neudorf said the process allows for the court to extend the time to file the proposal in additional 45- day periods for as long as five months after the initial 30- day stay of proceedings. Gibson said efforts will be made to have San Gold's shares listed on an alternative exchange while the period of creditor protection unfolds. martin. cash@ freepress. mb. ca By Martin Cash San Gold shares delisted as miner faces cash woes By Murray McNeill Marriott buys Delta hotel chain More leaving on a jet plane City airport sees boost By Geoff Kirbyson WAYNE GLOWACKI / WINNIPEG FREE PRESS FILES The Delta Winnipeg is expected to keep its name. ' We're trying to provide something that people actually want. The measure of that is always sales' - WAA president and CEO Barry Rempel PHIL HOSSACK / WINNIPEG FREE PRESS FILES More and more passengers are heading into Richardson International Airport for flights out of the city, the Winnipeg Airports Authority reported Tuesday. B_ 06_ Jan- 28- 15_ FP_ 01. indd B6 1/ 27/ 15 10: 38: 09 PM ;