CEO Carl Dymond says due diligence has uncovered additional outstanding debts
By René J. Roy
– with files from Jaymie L. White
STEPHENVILLE – In Sept. 2021, CEO Carl Dymond of the Dymond Group of Companies announced plans to purchase the Stephenville Regional Airport for roughly $200 million. The re-brand to the Stephenville Dymond International Airport will improve customer air service via construction of a new terminal, an air traffic control centre, and will land regional, national and international flights. The company will also manufacture large drones capable of carrying two cargo containers at a time.
The purchase is not yet finalized, and Dymond has taken exception to some of the statements made by members of the Stephenville Airport Corporation (SAC) in a recent CBC news article (Stephenville airport authority says it’s waiting for formal purchase offer from Dymond Group, Jan. 13).
“I don’t think (SAC) they’re going to refuse it. I think it’s going to be done when it’s done. The delay is a lot of things came out of that due diligence that we didn’t know about. We uncovered a lot – from bankruptcies to labour disputes to liens on property. There are creditors that are still not paid off that need to be paid off,” said Dymond via telephone interview on Sunday, Jan. 16.
Due diligence is routine when it comes to business deals, especially the larger, high-profile ones. It’s an investigation, audit, or review performed to confirm facts or details of a matter under consideration.
This process between Dymond Group and the SAC has been underway since before the official September announcement, and was all but completed over the 2021 holiday season. After investigation, standard practice is to draft a report on findings before a purchase of sale agreement can be crafted.
“It’s never just due diligence is done,” explained Dymond. “We have to analyze the risk.”
There are a number of financial concerns that Dymond’s representatives uncovered, and these include matters that the CEO does not feel fall within the scope of the purchase agreement as it was initially outlined. According to Dymond, those financial issues could exceed $250 thousand, and that will have to be discussed.
“We’re not liable for previous stuff. We said we were paying off their debts and that’s fine because that’s equipment stuff that we would pay off anyway. But, you know, having a quarter of a million dollars worth of debt because someone didn’t pay it off or bankruptcy in the late 90s? That’s not my problem because I’m not paying it off.”
Dymond remains fully committed to buying the airport, though the terms of the purchase agreement will have to be altered as a result of the investigation’s findings.
“They (SAC) know that deal has to go through,” said Dymond. “For us, this is a done deal as far as we’re concerned. We just need the formal sign off and to get all the legalities in place to make sure that, long term, all of the liabilities and stuff are covered off so that we’re not sued by someone in 2027 for something that happened in 1982.”
Dymond believes that it will be a couple of weeks at most before all of the paperwork is finalized from his team and the purchase agreement can finally be signed.
“There was so much stuff that came up in this due diligence. That’s why we could justify the time we were taking. We could have done more, but we are satisfied with the level of risk that we have right now.”
Dymond readily admits that he has felt hampered on multiple fronts throughout this process. The CBC article didn’t help according to Dymond, who cites it as a factor in some negotiation failures this past weekend.
“My credibility is my reputation and I’ve worked very hard to craft that over the years. So we’ve lost a couple of companies that were coming in to do construction work for us. They thought it was too risky, so they pulled out.”
The Dymond Group was able to salvage a couple of partnerships. Meanwhile fears cited by the board that the airport continue to function as such has left Dymond scratching his head.
“The airport is always going to be an airport. We can’t do anything on this airport without having it certified by Transport Canada as a civil aviation airport. Like… I don’t understand why the statement went out as it did.”
The Dymond Group is also in negotiations to acquire several other airports across Canada, but so far the Stephenville airport purchase has proven to be unique.
“I’ve never had any level of resistance from in anything in my life, like I’ve had with this. From the death threats, to the breaking of NDAs (non-disclosure agreements),” said Dymond. “I have never seen this level of sabotage.”
Dymond insists that the sale will go through within the very near future, regardless of rumours to the contrary. He sees the purchase as a win-win for all parties and residents of the Western region.
“People don’t need to hear the dirty laundry. They need to see the end result and that’s what we’re working towards,” said Dymond. “We’re going to make money off this airport but by default the people of Stephenville are going make money off this airport. That’s what I want. This is a great municipality. I want them to benefit from this airport.”
Among those feeling frustrated is Stephenville Mayor Tom Rose.
“When you get into a negotiated agreement like what is happening with Carl Dymond, it’s something you stay positive with until you take it to the end. You give confidence to the deal and that’s what I try to do as the mayor.”
Rose said there has been an undercurrent of conspiracy theories and opponents to the pending sale from the moment the deal was first announced.
“We’ve been working diligently with the Dymond Group of Companies and we’re working through due process and due diligence to make this happen. This is a turnaround event for the Town of Stephenville and its residents. It’s not just impacting Stephenville, but Western Newfoundland and the province. It is significant and people should be behind this. Unfortunately there are skeptics and sometimes they get some attention, but smarter, cooler heads will prevail on this one, and we will get the Dymond Group involved to move this town and airport forward.”
Rose explained that due diligence is mainly on the side of the buyer, and it is necessary for any purchase of this scale.
“The legal team of the Dymond Group of Companies has got to ensure that everything they are taking over on this airport, that there’s no stone unturned. If there’s liens against the airport, and there were a few liens on the airport that had to be identified, their monetary scales had to be identified to ensure that there was nothing that came up that they weren’t anticipating. But still, it all came up, and that’s part of the due diligence on a commercial side of a major file like this. They do this so, when they take over the airport, it is clean. It has a clean bill of health technically. Then they can move forward with no hidden secrets.”
Rose isn’t at all surprised at the length of time for this deal to close, citing numerous delays thanks to the prolonged pandemic.
“COVID has slowed a lot of things down. Even as a town we had to delay the building of our playground because we couldn’t get the project engineering down. We couldn’t get the supplies. We had to delay the bridge refurbishing for one year because of COVID, so there was a lot of things that came up in the due diligence and it ran its course for 120 days, but that’s done. The Dymond Group is happy on their side and the airport is happy on their side, so now it’s just a matter of the purchase agreement being framed out by the Dymond Group’s legal counsel, presented to the board, and the board votes on it. If they vote in favour, the Dymond Group owns the airport and he moves forward with his project.”
Rose isn’t particularly worried about the delay either. The mayor sits as a liaison on the board, representing the town’s interest, but is not a voting member.
“Why would Carl Dymond want to come in here if we weren’t going to operate the airport as an airport? It shouldn’t even have been brought forward as an item because it’s irrelevant. Right now we have very little planes and very little traffic. With the Dymond Group we are going to have a lot more planes and a lot more traffic, so it’s going to run as an airport better than it ever did.”
His focus is on removing taxpayer burden surrounding the airport.
“That’s the challenges with snippets of an interview or a conversation. Sometimes it can be twisted. I am behind this deal 100 per cent. I’m behind this deal because I don’t want the taxpayers of this town to put another half million dollars a year into that airport when they can’t even get on a flight every day and fly out of here.”
Rose remains confident that the deal will go through. He doesn’t believe that other large companies that have also expressed interest in Stephenville after the September announcement will be dissuaded.
“No matter where something happens, whether it is Stephenville or some other town in some other province in this country, there are always going to be a faction that are going to be against something. Some people don’t want success and we’ve seen that here. We’ve had a lot of skeptics and naysayers. These companies, no matter where they are going to go, they’re going to have factions with the same message. The naysayers, the delusionists – and that’s just part of what’s out there in this world – for these skeptics, they need to educate themselves on e-commerce and business, because they are truly not educated. They should spend their time on stuff that are more positive, maybe join the Guardian Angels network and help your neighbour, help a senior.”
Representatives for the Stephenville Airport Corporation did not respond to inquiries prior to deadline.