Olds Fibre Ltd. Annual General Meeting
Friday, July 8, 2022 - 7:00 pm
Click here for the complete agenda package
In the interests of keeping residents and stakeholders informed on the restructuring of Olds Fibre Ltd. (OFL), the following is a summary on the background, status, financial impact, and future possibilities for OFL.
OFL is the organization that owns and operates O-NET, a high-speed internet and services provider. OFL was founded and housed within the Olds Institute for Regional and Community Development (OIRCD) for over a decade.
The Town of Olds initiated the forbearance process for OIRCD in May 2020, resulting in OIRCD assets entering receivership. The Town became the sole shareholder of OFL in October 2021. At this time, OIRCD owed the Town approximately $18 million in loans and guarantees. The bulk of this debt was accumulated between 2011 and 2014 when the Town financed the capital costs to establish O-NET.
OFL is currently being restructured by the Town into a Municipally Controlled Corporation (MCC) that operates at arm’s length from the municipality. MCC’s are legislated by the Government of Alberta via the Municipal Government Act (section 75.1), the Municipally Controlled Corporations Regulation, and the Business Corporations Act. At present, the OFL board of directors is comprised of the entirety of Town Council. And while it is the intention of Council to see public-at-large-members appointed to the OFL board, this cannot occur until restructuring and current negotiations are complete.
Since the forbearance process began, the Town of Olds has made two debenture payments on behalf of OFL, totaling $905,294. As part of the restructuring process, the Town of Olds and OFL will enter into a $15 million loan agreement to cover the costs of the outstanding debt plus all legal and restructuring fees incurred since 2020. The approximate total for legal and restructuring costs to date is $800,000. The remaining amount of debt derives from a line of credit that OFL holds but the Town guarantees. OFL (as an MCC) will owe the Town the total of these outstanding amounts, which represent over 50% of the Town’s legislated debt limit and is a significant impediment to the growth and sustainability of our Town.
The Town of Olds is committed to both the proud legacy of O-NET and to the long-term fiscal stability of the Town. With these in mind, Council will ensure that O-NET customers are provided with continued quality services and that the Town’s long-term financial health is assured.
Since 2020, Council has considered several options for OFL, including its continued operation as an MCC, the purchase of OFL by a third-party entity, and partnerships that will seek to grow OFL and improve its financial position and long-term outlook.
There is one active negotiation process underway regarding the future of OFL, which is subject to a non-disclosure agreement. And although few details can be shared at this time; information will be available as soon as reasonably possible.
We hope this information has been of value to you. And while not everything can be shared presently, the Town understands the delicate nature and long history of this matter and realizes that not everyone will agree with the chosen path forward. However, given the financial exposure of the Town to the OIRCD debt, all options must and are being explored to improve this situation.
Questions may be directed to:
Chief Administrative Officer
Town of Olds