Deal to refinance Senators breaks down

January 1, 2003


OTTAWA -- A proposal to refinance the Ottawa Senators fell through, raising questions about the team's financial health.

The deal was to involve the sale of the team by majority owner Rod Bryden to a limited partnership for $118.7 million.

The agreement would have given the Senators some badly needed cash and a better lease with the Corel Centre. The terms included injecting $26.7 million into the team and paying off a $9.1 million loan from the NHL.

"The transaction will not proceed," Gordon Fox of Norfolk Capital Partners, which managed the limited partnership, told the Globe and Mail. "It's a sad story for everyone."

NHL spokesman Frank Brown confirmed to The Associated Press on Wednesday that the Senators were unable to complete the refinancing.

"We are working with the club to deal with that reality," he said.

Bryden declined comment.

The website of TSN, a Canadian cable sports network, quoted unidentified sources as saying the players did not receive their paychecks as scheduled Wednesday. Instead, they got a letter from Bryden explaining the financial mess.

Senators spokesman Phil Legault refused comment when reached by the AP.

The Senators have lost money in each of the past three seasons, including $9.5 million in 2001-02. The team owes more than $101.7 million to a group of creditors and faces continuing cash shortfalls, documents show.

This is the second time in the last year that the refinancing has fallen apart. On Jan. 2, 2002, Bryden sold the team to the Norfolk partnership for $118.7 million. However, that deal fell apart when Covanta Energy Corp., a U.S. company that is a major lender to the team, filed for bankruptcy protection in April.

The Senators were formed in 1990 for a $50 million expansion fee and started play in 1992.


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GA

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