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Thursday, September 09, 2010 |
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Thursday, September 09, 2010 |
News Release: October 2, 1997 Alberta Treasury Branches and the Edmonton Oilers sale In the past few weeks, there has been considerable speculation about the role of Alberta Treasury Branches (ATB) in the pending sale of the Edmonton Oilers. Like any other financial institution, ATB is very concerned about maintaining the confidentiality of dealings with all of our customers, including Mr. Pocklington. However, because of the importance of this matter to the people of Edmonton and because the financial affairs of the Pocklington Financial Corporation have been in the public forum for some time, an exception has been made. Mr. Pocklington has agreed to the release of this basic information about the relationship between the sale of the Edmonton Oilers and ATB. No further information can be released at this time. Furthermore, confidentiality will be strictly maintained on all dealings with prospective new owners. The following background information responds to the key questions about ATBĘs role in the sale of the Edmonton Oilers. In summary:
If reporters would like clarification of any of these points, please contact Darlene Dickinson, Chief Public Affairs Officer at Alberta Treasury Branches (403) 493-7307. No interviews will be arranged at this time. Questions and Answers ATB's role in the sale of the Edmonton Oilers Why is the team for sale? It is well known that Mr. Pocklington has outstanding loans with ATB. Like any other person who borrows money from a financial institution, the loans must be repaid. We have been working with Mr. Pocklington to find the best solution and put a workable repayment plan in place. As a result, Mr. Pocklington chose to sell the team, rather than his other business assets, to repay ATB. Mr. Pocklington's decision to sell the team was announced on June 8, 1997. How much does Mr. Pocklington owe ATB? The total amount of Pocklington loans is confidential. Has ATB put some of its staff in the Edmonton Oilers office? Because of our security interest and the complexities of the process to sell the team, ATB has taken steps to ensure that the value of the asset is maximized while the team is being sold. This is not an unusual step for a financial institution to take. Robert Kallir, ATBĘs General Counsel, was named to the Board of Oilers Hockey Inc. to ensure that the value of the asset is maximized. John Ramsey was appointed Chief Operating Officer of Oilers Hockey Inc. to enhance the asset and assist, initially in the proposed share offering, and now in the sale of the hockey team. These appointment decisions were made jointly by ATB and Mr. Pocklington. What role is ATB playing in the sale of the team? ATB's role in the sale process simply is that of the "lender". We have a loan that must be repaid. ATB's role in this case is no different than it would be with any other outstanding loan. We are not in the business of forgiving loans or making special arrangements. When a borrower is unable to repay a loan or a mortgage, appropriate action must be taken. Mr. Pocklington has made a decision to sell the team in order to pay down his debt to ATB. The maximum price for the Oilers must be obtained, taking into account the requirements of the Location Agreement. ATB's obligation is to abide by the Location Agreement and to ensure the outstanding loans are repaid. Who is running the sale process? Midland Walwyn is handling the sale. What is the sale process? Since the sale was announced in June, Midland Walwyn has facilitated the sale process. Economic Development Edmonton (EDE) has worked in the community to see if local buyers can be found. ATB has not played a role to date in the sale process. Peter Pocklington, Economic Development Edmonton, the City of Edmonton, Edmonton Northlands, and ATB are co-signatories of the Location Agreement. That Agreement sets out certain conditions regarding the sale of the team. Under the Location Agreement, the hockey team can be sold to a buyer who wants to move the team to another market. If a buyer wanting to move the team comes forward with an offer thatĘs less than $70 million US, Northlands, the City of Edmonton and EDE would have 30 days to match the offer or find a buyer willing to match the offer up to a maximum of $70 million US. If the offer is over $70 million US, Northlands, the City and EDE would have 30 days to buy the team or find a buyer to keep the team in Edmonton for $70 million US. The attached chart (page 7) describes the sales process. Where are we in the process? When Midland Walwyn was hired to handle the sale, the first priority was to make every effort to find buyers to keep the team in Edmonton. As of September 12, no offers had been received and a decision was made to open the sale to other offers. As of today, no offers have been received from buyers wanting to move the team from Edmonton, although we expect some soon. When an external offer is received, we expect that the conditions and timelines under the Location Agreement will be triggered. In terms of local offers, Midland Walwyn has received two proposals since September 17. Both proposals require a lot more work to firm up the details. What are ATB's expectations in terms of an offer to buy the team? ATB's expectations are simple and clear: we need to be repaid. If the team is sold to a buyer willing to keep the team in Edmonton, we expect to receive a cash value of up to $70 million US. If no buyer willing to keep the team in Edmonton can be found, the team will be sold to the highest bidder and subject to relocation. As an Alberta business, we're naturally hoping that the new owner wants to keep the team in Edmonton. But our obligations are clear: to abide by the conditions of the Location Agreement and to ensure that outstanding loans are repaid. Is ATB prepared to finance the deal? If the prospective buyer is looking at financing from ATB, we would look at the circumstances in the same way as any other financial institution. In other words, if the prospective buyers would qualify for loans from the CIBC or the Royal Bank, we would consider it on the same terms. But there are no special deals involved. ATB does not accept the position that we have an obligation to give special deals to prospective local buyers because we loaned Mr. Pocklington money. Our role is to recover our loans. Who else needs to approve the offer and what conditions have to be met? ATB's role is only to ensure that outstanding loans are paid back. Depending on the conditions of any offer that may be forthcoming, other approvals may be required (Northlands, City, etc.). The NHL must also be satisfied not only that the prospective owner has sufficient resources to buy the team, but also that they have the wherewithal to operate the team on an ongoing basis, and must approve any sale or relocation. There are also a number of complex legal issues that will need to be addressed. What happens next? Naturally, all parties are anxious to see the issue resolved as quickly as possible. ATB is anxious to be repaid, Mr. Pocklington is anxious to repay his debts, and the NHL wants decisions made about new owners so they can proceed with plans for next year's season. If a local buyer comes forward with an acceptable offer, ATB would consent to the sale. However, we are the last ones to provide consent, not the first. If an offer comes forward calling for the team to be relocated, the terms of the Location Agreement will kick in. Local buyers would then have 30 days to match the offer up to a maximum of $70 million US. What's the status of the local offers? We're not prepared to comment on the details of the local proposals. As John Butler, representative of the Edmonton Investors Group Inc. said at the news conference, there is a lot of work to be done to firm up the details. Is ATB prepared to be a joint owner of the team or to put money in through a marketing arrangement? ATB is not in the business of owning hockey teams. We've set out a clear direction in our business plan and, with a new Board in place, we're committed to follow through on that direction. In terms of marketing, ATB's focus is on selling our products, just like any other business. If ATB chooses to include the Edmonton Coliseum in its future marketing plans, we would do so on the same basis as any other business in Edmonton. But, that decision is not related to the sale of the team and marketing dollars will not be considered as part of the purchase price.
For further information please contact: Darlene Dickinson |
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