Ben Eoin Golf Club: ACOA Responds

As I mentioned in last week’s piece on The Lakes Golf Club in Ben Eoin, I had asked ACOA, which holds a $3.5 million equity stake in the club, some questions about the sale.

I was promised an answer by 5:00 PM last Tuesday, which was pushed to 11:00 AM last Wednesday and which actually materialized at 8:50 AM on Thursday. I will let you judge whether it was worth the wait:

Ben Eoin Golf Club Limited has authorized the Atlantic Canada Opportunities Agency (ACOA) to disclose the following details of its contribution agreement. A repayable contribution agreement was concluded between Ben Eoin Golf Club Limited and Enterprise Cape Breton Corporation (ECBC) and, upon the dissolution of ECBC, vested in ACOA.

The contribution agreement between ACOA and Ben Eoin Golf Club Limited provides for repayment terms based on 45.5% of distributable income on an annual basis. The repayment schedule came into effect in 2016, with the first payment due in 2017. The Agency monitors financial statements each fiscal year and invoices Ben Eoin Golf Club Limited accordingly. To date, Ben Eoin Golf Club Limited has repaid $10,018 of the principal.

ACOA has not demanded full payment of the contribution amount and does not have any pending requests from Ben Eoin Golf Club Limited to amend the terms of the contribution agreement. The Agency evaluates each request and conducts its due diligence based on applicable policies and procedures and specific circumstances.

ACOA officials continue to deal with representatives from the Ben Eoin Golf Club Limited and does not have any information or comments to provide in regards to the matters involving other parties.

Compare that to what Jerry Redmond, the Treasurer of the Ben Eoin Golf Club Limited, told the CBC’s Tom Ayers on February 19:

Tell you the truth, ACOA has said to me, and I’m sure they’ve said to other groups that may or may not have spoken to them, they would say that they’ll start talks over again with any party that is able to take over the golf course or thinks they can take over the golf course.

So they’re quite able and willing to talk to this particular group about…those preferred shares.

If ACOA has said that to Redmond, then it has as good as said so to the Ben Eoin Development Group, because Redmond works for a number of the businessmen who own BEDGInc. (Asked by Ayers if he considered that a conflict of interest, Redmond said, “It certainly wasn’t a problem for the 97% [of shareholders] that voted in favor.” Which is not a denial of a conflict of interest but certainly suggests a general apathy toward any possible conflict of interest, to which I guess I must bow.)

I listened carefully again to that interview and noted what Redmond said when Ayers asked if the golf course’s financial situation was such that it might not have opened this season:

I think um, our suppliers were very good to us for sure we still have some outstanding debts that had to do with last year and even, far before that…But if we try to stay somewhat current with them, they were willing to keep helping us and supplying the product. So, they were very good. What really hurts is ACOA … finally came back and said, ‘There is a repayment schedule. Here it is. Here’s your first invoice.’ And that’s when it really hit home that, OK, we could be in trouble.

Asked if ACOA would have renegotiated the deal with the existing owners, Redmond said:

No…we had a meeting on that last summer, last June, where we had our…director of operations and myself, who sat down with ACOA and our Liberal MP and went through…the structure of that debt and the chances of renegotiation and we quickly found out that there was none. They could only deal with a brand new group. That particular arrangement was in position for so long, 10 years, and by the time we sat down it would have been 11 years. They said they can’t change anything. That they’re bound by those restructured repayment plans that was amended to the original agreement and the amendment was signed in 2008 and they said they’re bound by it.

So ACOA may not have any “pending” requests from Ben Eoin Golf Ltd to renegotiate payments, but according to Redmond, that’s just because the agency has already turned them down.

Maybe ACOA actually thinks it has a better chance of being repaid by these new owners (although, as an observer pointed out to me this weekend, who is likely to make money from a golf course with a four-month season?)

Anyway, I promised to let you know what ACOA said, and I did.

Making sense of it all is another matter.

 

 

 

 

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