2001: Business - New funds, goals for Links Group
By Scott Kauffman
The Links Group, one of the biggest golf operators in Myrtle Beach, has emerged from Chapter 11 bankruptcy protection with new investors and lofty goals.
U.S. Bankruptcy Court in Columbia, S.C., last month approved the Murrells Inlet, S.C.-based company’s reorganization plan.
“Now we’re ready to move forward and grow again,” said Links Group founder and president Ken Folkes, whose company oversees 14 courses in the Carolinas and Georgia, and 10 in Myrtle Beach.
Under terms of the deal, Links Group, which has leased and managed courses in the Myrtle Beach area since 1995, is controlled by Member Tee Management. According to Folkes, Member Tee Management has committed up to $4 million in new capital, which gives the Raleigh, N.C.-based group 75 percent control of Links Group.
When Links Group filed for Chapter 11 protection from creditors Jan. 10, ClubLink Corp. of King City, Ontario, the largest course operator in Canada, owned 92 percent of the company’s preferred stock.
Other reorganization terms:
• Links Group has a restructured $3.6 million loan with Bank of America, spreading out the remaining $2.4 million debt over a 15-year period rather than three years.
• Links Group has renegotiated contracts with its 11 course lessors.
• Other creditors will be paid 100 percent on the dollar within a six-year period or, Folkes said, they can opt to be paid off in three years at 50 percent of outstanding balances.
Total debt was $9.4 million as of March 31, court documents show.
Links Group plans to grow to 20 or more courses in the coming year, achieving an economy of scale that Folkes believes will be the key to his company’s turnaround: “By adding some more courses, it’ll help tremendously with overhead.”
So much so, the reorganization plan projects profits of $216,674 for 2001, and up to $4.3 million by 2005.
For a company that has recorded operating deficits for each of the last three years, and which is located in one of the more competitive markets in the country, the prediction seems bold.
Don Wizeman, chief executive for Myrtle Beach-based International Resort & Golf Resources, isn’t convinced the Myrtle Beach market will escape its economic doldrums soon, let alone Links Group.
“When you’re averaging $26 a round and doing less than 30,000 rounds, and your economy of scale didn’t work with 10 courses, it’s not going to work with 20,” said Wizeman, whose company consults on golf and other resort-related interests. “Can they hit their numbers? Chances are slim to none.
“This isn’t fuzzy math, it’s insane math. In my opinion, if they last a year to 18 months, I’ll be surprised.”