Gateway Casinos and Entertainment receives $200M federal loan
September 25, 2020
On September 25, the Canada Enterprise Emergency Funding Corp. (CEEFC) announced its first loan under the Large Employer Emergency Financing Facility (LEEFF). The agreement provides Gateway Casinos & Entertainment Limited with access to $200 million of liquidity.
Other applications for LEEFF financing are currently under consideration. To protect the financial interests of taxpayers, rigorous due diligence is required.
LEEFF is intended to provide bridge financing to Canada's largest employers, whose needs during the pandemic are not being met through conventional financing. It provides large Canadian employers with access to credit in order to preserve jobs and continue operations during this challenging period.
"LEEFF was created to provide bridge financing to Canada's largest employers whose needs during the pandemic are not being met through conventional financing, and to help protect Canadian jobs during a period of unprecedented challenges and uncertainty. With this first loan, we are supporting thousands of Gateway employees and their families by providing the company with the liquidity it needs to begin to resume operations and return to profitability," said David Mansell, CEO, Canada Enterprise Emergency Funding Corp.
"COVID-19 closed businesses across Canada, with the hospitality and entertainment sectors severely affected. It hit our employees and their families and communities hard. The LEEFF financing will support restarting our operations and returning people to work when it is safe and viable to do so. We are appreciative of the LEEFF program and, through a successful and sustainable restart of operations, we will bring jobs back and begin the work of repaying the LEEFF facility," said Anthony Santo, CEO of Gateway Casinos & Entertainment Limited.
Gateway has properties in British Columbia, Ontario, and Alberta and has 8,000 employees. Most have been inactive due to the pandemic and its effect on operations. The LEEFF loan will allow Gateway to start bringing employees back on board as properties reopen in accordance with local and provincial guidelines. Gateway operates 26 properties in British Columbia, Ontario and Alberta.
LEEFF is open to all large, for-profit Canadian employers--who have a significant impact on Canada's economy and provide millions of jobs to Canadians--with the exception of companies in the financial sector. Generally speaking, that means a company must have more than $300 million a year in revenues and require a loan of at least $60 million.
Certain not-for-profit enterprises, such as airports, may also be eligible. Any company that has been found guilty of tax evasion is not eligible.
Companies that receive a loan through LEEFF must agree to sustain their domestic operations, make reasonable commercial efforts to minimize the loss of jobs, and demonstrate a clear plan to return to financial stability. They must also agree to place restrictions on executive compensation, dividends, and share buybacks and publish annual climate-related disclosure reports indicating how their future operations will support environmental sustainability and Canada's climate goals.
SOURCE: Canada Enterprise Emergency Funding Corporation