http://www.rockymountainnews.com/drmn/other_business/article/0,2777,DRMN_23916_4906240,00.html

Molson Coors has sold part of its interest in the Montreal Canadiens hockey franchise to majority owner George Gillett for $36.1 million.
As part of the deal, Molson Coors has been released from an obligation to guarantee the bank loan Gillett took out to buy the hockey team from Molson in 2001.

The deal involves a "preferred interest" Molson Coors held in the club since the sale. Molson Coors still owns 19.9 percent of the common shares in the hockey club.

Molson Coors disclosed the June 30 transaction in its quarterly report to the Securities and Exchange Commission.

"We're totally and fully committed to maintaining our share" of the team, Molson spokesman Paul de la Plante said Wednesday. "We have full confidence in the Gillett group, the way they run the team both financially and on the ice. We're as much behind the Canadiens as we've ever been."

Molson's guarantee of Gillett's bank loan was a concern for some as the Canadian brewer merged with Golden's Adolph Coors Co. in 2005, the same time as an NHL lockout eliminated the 2004-05 season.

While that liability is now gone, Molson Coors still has certain guarantees it makes to the NHL as a co-owner of the Canadiens, as well as a leasing commitment for the arena, now known as Bell Centre.

Gillett is the former owner of the Vail ski resort. He has emerged from his 1991 bankruptcy to own interests in skiing, real estate, sports and meatpacking. He declined to comment for this article.

NHL spokesman Frank Brown said the league's board of governors has already approved the transaction.

The Canadiens are one of hockey's most storied franchises, with 24 Stanley Cup championships dating to the 1915-16 season.

But in the 1990s, the club was a money loser, putting pressure on Molson to sell it for the sake of its shareholders.

The 2001 deal gave Gillett 80 percent of the team and 100 percent of the arena, then known as the Molson Centre. Molson said it would get $190 million Canadian in cash in a deal "valued at $275 million (Canadian)." Those sums were roughly equivalent to $127 million and $184 million U.S. at the time.

Molson's then-CEO, Dan O'Neill, was quoted by the Canadian Press in 2001 as saying Molson would take a "devastating" loss and "huge write-down." Molson built the arena for $285 million Canadian ($208 million U.S.) just five years before.

The preferred interest, valued on the Molson books at $86.5 million Canadian, or about $77 million U.S., was part of the Gillett sale. It was "a financial vehicle that allowed the Gillett group to defer some of the payments," de la Plante said.

De la Plante said Molson Coors accountants are reviewing the sale to determine how to record a gain or loss in the third quarter, and it cannot be assumed that the preferred interest was sold at a loss.

"It's not going to be a simple subtraction," he said.