Wetherly Speaks During Second Day Of Hearings
Only a new arrangement with the Quebec government can extricate racetrack operator Attractions Hippiques from the financial vice its now in, president Ian Wetherly said
this morning during Day 2 of a legal battle in Montreal Superior Court pitting the company and provincial horsemen and breeders.
Attractions Hippiques, which runs Hippodrome de Montréal and three other Quebec tracks in Aylmer, Quebec City and Trois-Rivières, has been in creditor protection since June. It owes its lenders $50 million, and "without a new deal with the government, it's impossible to get new financing," Wetherly said.
Company officials have had five meetings since October with representatives of the finance ministry and talks are ongoing, Wetherly said. He said it's "highly likely" the company will have a restructuring plan ready in the next 30-60 days.
Projected operating expenses for the four provincial tracks and the teletheatre network is $30 million for 2009, while projected revenue from pari-mutuel betting and racetrack VLTs is about $36 million, Wetherly said.
That leaves just $6 million for purses, capital expenses and the lenders. The contract Attractions Hippiques signed when it took over the tracks from the Quebec government in 2006 specified at least $16.7 million for purses in 2009.
Wetherly said the 'ludoplex' gaming centres set up by Loto-Quebec next to the tracks in Quebec City and Trois-Rivières in 2006 are what threw off Attractions Hippiques' financial plan.
Instead of receiving an expected $12-13 million from its 22.5-per-cent share of the net profits from their 535 VLTs in 2008, the company got just $4 million, Wetherly said. "The ludoplex has been a flop. The public doesn't go to these new gaming halls. It has not worked."
(Trot Insider exclusive by Paul Delean)
Because there are no
Because there are no details, Mr. Wetherly's numbers make little or no sense.Here are some questions I would have asked him had I been present at the hearings:
(1) What makes up the $30 million in operating costs?
(2) What portion of the $36 million in projected revenues comes from VLT's? Is it $4 million or is it $12-13 million?
(3) If it is $4 million what is the Quebec Government's explanation for not forcing Lotto Quebec to conform to its contractual undertakings? Or was the contract signed by Attractions Hippiques flawed? If so, what hope can it have to keep on going?
(4) If it is $12-13 million and thus should have been sufficient to allow Mr. Wetherly's company to comply with its undertaking to have purses of $16.7 million in 2009, how did management foresee being a viable business ? The difference of $8 million would have guaranteed a deficit and thus , would have left nothing for the payment of debts and/or capital expenditures.
(5) What are the guarantees given to the various creditors and how will they ever recover at least part of their money? Without knowing what will be left after the bankruptcy is discharged, there can hardly be a viable plan for the future of the industry.
In this mess, Atractions Hippiques and the provincial government are playing with the lives of thousands of hard working people and their families. It is time for all to come clean and state the facts.
This industry cannot and will not survive without some governmental support which support may ,in fact , be the least expensive way of ensuring that thousand of people can be kept off the unemployment and /or welfare rolls.How else can the province create or safeguard almost 5,000 jobs with an "investment" of $12-15 million /year? New York, New Jersey, Indiana, Illinois and Pennsylvania, not to speak of Ontario, have all seen the " light". Isn't it time for Mr. Charest to tag along? Where there is a will there is a way!
maybe if Attractions
maybe if Attractions hippique would have copied a gaming site like ontario did, it would have worked.
At ludoplexes people couldnt play without a player card. Also the house limited the amount of money someone can put in.
They wonder why people dont go in these gaming facilities?