New owner may land Stephenville airport for $6.90, plus $1M in debt payments

CBC News has obtained a preliminary draft purchase agreement that may reveal details about the pending sale of the Stephenville airport.

According to the document, a company directed by Ottawa businessman Carl Dymond will pay $6.90 to acquire the airport.

The new owner would also pay off existing airport debts of more than $1 million as part of the deal.

Dymond's Newfoundland-based numbered company,which he is calling the Greater N.L. Partnership, took issue with those figures.

"The numbers on, and structure of the private and confidential draft document you have obtained are inaccurate," media co-ordinator Amy Felton wrote in an email to CBC News.

"In line with the restrictions established with the [non-disclosure agreement], we are not able to provide any monetary details regarding this deal."

Felton added that Greater N.L. Partnership "has paid the required sums to the trustee involved and we are currently following the established discharge process."

There has been no public announcement about the timelines associated with the sale closing.

Nearly a year ago, Dymond held a news conference in the western Newfoundland town to outline his ambitious vision for the facility.

Those plans include a $200-million infusion of private-sector cash into airport infrastructure and the community, a massive cargo drone manufacturing operation, the return of major airlines, and the creation of thousands of jobs.

An initial deadline for the deal to be done was set for the end of December. Six months after that original timeline passed, in late June, the two sides announced they had signed a binding acquisition agreement.

• CBC INVESTIGATES | Mystery man, mystery plan: Questions abound on Stephenville airport acquisition

The document leaked to CBC News appears to date before that, in the spring. It references a closing date in late April, and stresses that time is of the essence for the agreement.

It is unclearwhether a further agreement was negotiated from the leaked draft, or what changes may have been made later.

CBC News sent a detailed list of information from the leaked tentative deal to both the Stephenville Airport Corporation board chair and Dymond officials.

While Dymond officials called the numbers "inaccurate," the airport corporation board didn't respond.

Payments required to complete deal

The tentative agreement lays out financial details for the deal to close.

In addition to the purchase price of $6.90, Dymond's company must transfer other amounts to cover existing airport liabilities and debts.

That includes more than $60,000 related to employee severance benefits and vacation payments, plus an amount owing under a creditor proposal.

The new owner must also pay off the airport's existing line of credit. The leaked draft does not put a dollar figure on that.

However, Newfoundland and Labrador government documents do shed some light on that liability.

• Weeks after announcement of Stephenville airport deal, work continues to complete sale conditions

For years, the province has backstopped a line of credit held by the Stephenville Airport Corporation to fund its operations.

That guarantee is capped at $900,000. As of March 2021, government financial records listed a contingent liability of $840,000.

The Department of Industry said the balance fluctuates based on its use but stays within the approved limit, and steered further inquiries to the corporation.

Last month, the province stressed that "the Stephenville Airport Corporation is required to pay the full amount owing on the line of credit and close the line of credit" before any deal is consummated.

Government officials told CBC News the guarantee will be terminated, and will not transfer to any new owner.

According to the leaked draft, the new owners will assume other existing liabilities totalling $190,000 at closing time, and pay or satisfy them afterwards.

That total includes a $60,000 interest-free loan from a federal program aimed at helping businesses through the pandemic.

Combined, those financial commitments related to the closing of the deal top $1 million.

Fire hall guarantee listed in draft agreement

In the version of the document obtained by CBC News, the new owner is also required to provide evidence of a corporate guarantee up to a limit of $10 millionto support the Town of Stephenville's construction of a new fire station.

The document notes that the vendor can waive that requirement.

In June, the Stephenville town council passed a motion to sign a letter of intent that Dymond sent to the town about the fire hall commitment.

In that letter, Dymond indicated his company will release funds on an invoice basis after the contracts for the work have been awarded.

At the time, one councillor dissented, saying the town should have a stronger guarantee.

• Stephenville councillor questions fire hall pledge linked to airport purchase

According to the leaked document, the new owner must also commit to matching federal funding, to a limit of $1.7 million, for the rehabilitation of the airfield lighting system.

That requirement can also be waived, the agreement notes.

No scheduled passenger service for 2 years

The Stephenville airport has struggled for yearswoes that were exacerbated by the pandemic.

In January 2020, anchor tenant PAL Airlines ended its year-round service to Stephenville.

Months later, as COVID grounded flights worldwide, Porter Airlines and Sunwing also departed.

There was no scheduled passenger service for more than two years, until Sunwing returned with a weekly flight to Toronto this summer.

Stephenville town council has financially supported the airport, voting three times in recent months to give the operation a $50,000 grant to keep it running.

Local politicians have said the airport acquisition will create new opportunities for the region and provide much-needed jobs.

Read more from CBC Newfoundland and Labrador