Struggling to respect €25m limit

Emergency savings were triggered by the Irish Greyhound Board after extreme financial pressure saw it struggle to respect a €25m borrowing limit.

Board minutes reveal that the organisation has been at the cusp of its debt cap since early 2010, particularly at seasonal pinch points.

The situation exists despite its arrangements with AIB being on interest-only terms.

Board papers show that from 2016 onwards it had planned to repay up to €5m a year to service its loan.

The company’s exposure built up due to unexpected costs in the construction of its Limerick stadium and an inability to generate enough money from the sale of three key sites in the city.

On May 4, 2010, CEO Adrian Neilan, circulated figures to the board which said its deficit was €24.8m. In Dec 2010, the board was told the problem was likely to worsen in 2011.

“The net balance for 2010 is €22.1m while [for] 2011 is €26.8m which is a concern as the borrowing limit is €25m. It was noted that the IGB are €1.8m over the current overdraft limit,” it said.

The IGB responded by cutting its racing schedule at the start of 2011 and seeking emergency savings.

Six months later, in Jun 2011, the board was told that as a result of the cost-cutting measures, the IGB was under its borrowing limit but was on course to hit it again. “The cash flow balance for 2011 is €23m while for 2012 it is €24.7m and the board’s borrowing limit is €25m. Costs have been reduced by 43%. Revenue needs to be increased and costs reduced,” it said.

The IGB said at the end of 2011 its long-term debt stood at €22.7m and it owed €5.8m to creditors due to be paid within one year. Internal records show that concerns about the debt burden were aired when the loan was first applied for.

In Aug 2006, the then chairman, Dick O’Sullivan, inquired if the board was in a position to service the sum. “It was noted that the board’s ability to repay its debt would approximate €4m-€5m per year once the capital programme was completed,” IGB minutes said.