Maui Land & Pineapple Co. Inc. will sell its second golf course in two years, in an effort to provide the financially struggling company with cash to pay down debt.

The company, which owns Kapalua Resort, announced a deal yesterday to sell its Kapalua Bay Golf Course for $24.1 million.

Under the agreement, Maui Land will continue to operate the course through March 31 under a lease.

The buyer is TY Management Corp., a company formed by Tadashi Yanai, chairman and chief executive of Tokyo-based Fast Retailing Co. Ltd., which operates more than 760 apparel stores under the UNIQLO name mostly in Japan.

TY Management already owns Kapalua Resort’s other golf course, The Plantation Course, which it bought last year from Maui Land for $50 million in a similar purchase/lease-back deal.

The Bay Course sale is expected to close by the end of this month.

The transaction will help Maui Land address severe liquidity problems that stem from downturns in the real estate and tourism industries as well as trouble in the company’s former core business, pineapple production.

Maui Land suffered a net loss of $123 million last year, following a $79 million loss in 2008. In the first half of this year, the company lost $7.3 million.

In a quarterly financial report released last month, Maui Land said it is highly dependent on selling real estate assets to refinance debt.

The company said its liabilities exceeded assets by $68.5 million as of June 30. The company also said it is under pressure to repay or restructure significant debt by March, and that there is "substantial doubt about the company’s ability to continue as a going concern."

As of June 30, Maui Land’s outstanding debt was $100.2 million.

However, last month the company paid that down by $40 million, following a stock sale completed July 29.

Ryan Churchill, Maui Land president and chief operating officer, said proceeds from the stock sale and the Bay Course will significantly ease the company’s debt load.

"That puts us in a great position," he said.

Churchill said Maui Land still needs to restructure remaining debt maturing in March, and continues to pursue the sale of a 20-acre industrial site in Kahului and some land in Upcountry.

Besides the two golf course sales, Maui Land earlier this year sold a 128-acre plot of land and a 2-acre parcel that included the company’s former administrative office building for about $3.3 million.

Maui Land’s core asset is Kapalua Resort, which occupies a 1,650-acre portion of 21,800 mostly undeveloped acres owned by the company in West Maui.

The resort includes a Ritz-Carlton hotel, the time share and condominium complex Ritz-Carlton Club and Residences, a spa, the two golf courses, a tennis complex, several restaurants and eight residential subdivisions with more than 800 homes.

The Bay Course opened in 1975, and was designed by Arnold Palmer and Francis Duane. The course is older, shorter and less expensive to play than the Plantation Course.

The Bay Course has hosted many high-profile tournaments, including the Lincoln-Mercury Kapalua International and the 2008 LPGA Kapalua Classic.

Maui Land said it improved the greens, tee areas and irrigation on the Bay Course over the last two years. But no LPGA event was held there last year due to financial issues.

Maui Land subsidiary Kapalua Land Co. has a five-year contract with the LPGA to sponsor an annual golf tournament at Kapalua, but canceled the October 2009 event because it couldn’t defray costs with a title sponsor. The move led to a contract dispute that resulted in Maui Land paying the LPGA $700,000 in March as a partial settlement, half of which could be used to help pay for a future tournament. No LPGA competition in Kapalua will be held this year. Discussions are ongoing for an event next year.