Background:
On June 19, 2020, BDO Canada Limited (BDO) was commissioned by Town Council through their legal counsel, to provide financial and advisory services in respect of loans made to Olds Institute for Community and Regional Development (Olds Institute) and the loan guarantee of Olds Fibre Ltd. (Olds Fibre).
BDO determined that combined projected revenues of Olds Institute and Olds Fibre would be insufficient to cover the loan installments of principal and interest payments owed to the Town.
BDO also confirmed that a substantial risk exists for the Town of Olds, in terms of default on payment as the Town would be required to make payments on the funds borrowed from Alberta Capital Finance Authority (ACFA).
Olds Fibre Ltd. continues to require substantial capital investment in order for growth to occur, therefore Council has determined that the Town of Olds is not in a position to provide the required capital investment as a lender and has agreed to move forward and enter into a Municipally Controlled Corporation (MCC).
The Town of Olds has been the key financial supporter ($18M) of the development and operation of O-NET from the outset, however a warranted look into the fiscal situation of O-NET was required.
“I believe the outcome of the report justifies Council’s decision to conduct this review, and we are confident that O-NET will continue to deliver high quality services to their customers,” says Mayor Michael Muzychka.
Download the official news release
For more information:
Michael Muzychka, Mayor
Town of Olds
mmuzychka@olds.ca
www.olds.ca