Murray Wood: Who's hot and who's not
Every Friday, Murray Wood takes a look at the week's news and decides who's hot and who's not. This week's list includes...
Regina Exhibition Association Limited (REAL) is seeking the city’s permission to raise its debt ceiling from $13 million to $21 million to cover shortfalls resulting from the pandemic and to pay for sudden costs.
On Wednesday of next week, the request will be considered by the city’s executive committee.
Tim Reid, chief executive officer for REAL, said the organization’s finances have been strained by COVID-19 and the loss of revenue from cancelled events. For 2020, he forecasts a deficit of $6 million. In 2021, REAL is expected to lose an additional $1 million to $2 million.
“So the purpose of this is to make sure that we continue operating through 2020, and 2021,” Reid said. “If it’s not drawn upon, then it’s not needed, but if it was needed in an emergency circumstance, then it could be acted upon quickly.”
As a hypothetical, one of those emergency circumstances could include the need to activate the COVID-19 field hospital at Evraz Place with REAL taking care of providing food, Reid said.
A loan could also come in handy if REAL changes its business plan or needs to make a capital investment.
“It just gives us a little bit of room should we need to take something that has a significant financial impact and action it quickly,” Reid said.
Reid said the bulk of REAL’s debt capacity was accessed to buy equipment related to food and beverages, as well as installing it. As well, REAL draws on that line of credit when cash flow is tight.
“The other element that people probably don’t realize is that every time somebody buys a ticket, then we have those dollars in our bank account until the show’s delivered,” Reid said. “And so the reality of it is, our cash flow position has changed quite a bit with the impact of the public health order.”
