May 10
11
Cork Opera House Finances
Over the years the City Council advanced loans amounting in total to €2,793,424 to Cork Opera House. In 2007, the Council converted €1,936,351 of these loans to non- repayable capital grants. This left a loan balance outstanding of €857,073.
Having regard to the current financial situation of the Opera House, at this weeks Council meeting, the City Manager, recommended that this remaining balance of €857,073 be converted to a non-repayable capital grant. The City Council formally approved this arrangement on Monday last.
The Opera House is also seeking to restructure its short term loan and overdraft facilities. It is proposing to secure a loan of €1.5m repayable over a period of 15 years. In addition the Opera House will require an overdraft provision of up to €300,000 to cover cash flow situations. In the light of the current banking situation, in order for the Opera House to secure the €1.5m term loan, the Council has been requested to underwrite/guarantee the repayment of this loan. The Opera House has made provision in its budget for the repayment of the loan and future projections indicate ability to meet repayments. Council agreed this on Monday night.
As with all organisations in the current economic climate the Opera House is reviewing its costs and overheads. Whatever measures are necessary to ensure that deficits do not occur must be taken. In this regard, the Opera House is also seeking to generate increased income from the Half Moon Theatre.
The City Council is by far the largest shareholder in the Opera House holding 39% of the shares. The City Council under the Articles of Association appoints the Board of Directors of the Opera House. As a condition for the conversion and guarantee referred to above, the City Manager recommended that the Opera House in future be required to secure the approval of the City Council to any borrowing including overdraft accumulation over €300,000 and the Council agreed.
