In a reverse of the trend for Japanese companies to purchase international ski resorts in the 1980s, Harmony Resorts Niseko Pty Ltd (HRN), has announced it has acquired the Niseko Hanazono Ski Field from Tokyu Land Corporation (TLC).

The HRN purchase includes a ski-lifting business, resort leisure facilities and a fully serviced and sub-divided parcel of freehold development land, with the opportunity to develop 8,000 beds at the base of the ski area.

Australian Alpine Enterprises Pty Ltd (AAE), owner and operator of Victorian skifields and associated businesses at Mount Hotham and Falls Creek, has come to indicative terms to purchase 100% of HRN (subject to official Board approval).

Located on the Northern Island of Hokkaido, 120km (75 miles) from Sapporo, the Hanazono ski fields form a part of the greater Niseko Ski Area, one of the largest ski areas in Japan, boasting 31 lifts including a variety of gondolas and high speed detachable chairlifts. The Niseko area lays claim to some of the best quality snow in the world with only 8% water content and often receives snowfalls in excess of 15 metres (50 feet) in a single season.

The opportunity to purchase the Hanazono skifields was identified over twelve months ago by high profile Melbourne Minter Ellison lawyer, Roger Donazzan and AAE Managing Director, Colin Hackworth. Mr. Donazzan has been appointed Executive Chairman of HRN and its Japanese subsidiary whilst Mr. Hackworth has been appointed the Managing Director. Together they will have the responsibility for the ongoing management of the Japanese operations and the rollout of the real estate development strategy.

Mr. Donazzan commented on what a unique opportunity the purchase is for HRN.

"We have acquired at a discount from invested cost an operating ski field and business assets, together with a significant amount of serviced development land with most of the necessary infrastructure already in place. We will create a northern winter destination ski village of choice, not only for Australians and expats in Asia and Japan, but also for Japanese skiers and their families. The Japanese feel and experience will be maintained, whilst creating an international standard winter ski resort with all the components that we have come to expect here and in North America and Europe."

Mr. Hackworth noted that AAE is attracted to HRN because. "The investment will provide AAE with a consistent earnings capacity from operations in both hemispheres - an enviable position for any international ski resort operator, given the seasonality of the snow business. The opportunity to diversify into new markets will provide AAE with the scale to develop some real operating economies of scale across all of its business units both in Australia and Japan."

HRN will operate the Hanazono ski field in partnership with current owner TLC & Tokyu Resort Service Co. Limited which operates the adjacent skifield of Niseko Kogen.

In recent years more and more Australians have visited Niseko to experience the champagne powder skiing conditions. For the 2005 season Australians will be able to access the Niseko snowfields with direct flights from Cairns operated by Australian Airlines to Sapporo's New Chitose Airport. This puts the snowfields approximately eight hours in travelling time from the east coast of Australia.

In 2003/4 the Niseko resorts attracted 700,000 visitors, over 70% of whom frequented the ski areas of Hanazono, Kogen and Alpen. It is expected that the increased investment by HRN in the Hanazono area will provide a significant boost to visitation to the Niseko area with the continued influx of Australian skiers and boarders. HRN seeks to attract Australian skiers who might normally venture to Canada or North America to try out the Japan experience.

HRN plans to leverage the investment in both the Australian and Japanese markets with cross marketing activity designed to attract business to the Australian ski resorts of Mount Hotham and Falls Creek.

"The opportunity to tap into some of the world's largest markets such as China and the expat markets of Hong Kong and Singapore will be an important part of the distribution strategy implemented by HRN," added Mr. Hackworth.

The purchase is expected to be completed by November 2004.