Magna Entertainment extends due dates on loans

New York, Oct. 15 - Magna Entertainment Corp. said it has negotiated more time to repay its various financing arrangements.

The company's $40 million senior secured revolving credit facility with a Canadian bank will now mature on Nov. 17 instead of Oct. 15.

Magna's bridge facility with a subsidiary of MI Developments Inc., Magna Entertainment's controlling shareholder, has been extended to Dec. 1 from Oct. 31 and the maximum commitment increased to $125 million from $110 million. In addition, the company can reborrow the roughly $4.5 million it repaid in July, increasing the amount available by $19.5 million. However further draws will not be permitted after Nov. 17 unless the revolver is extended again or replaced.

MI Developments has also told Magna that the required $100 million repayment under the Gulfstream Park project financing has also been extended to Dec. 1. In that period, any repayments under the Gulfstream Park facility or Remington Park facility will not be subject to a make-whole payment.

Magna Entertainment paid a $0.4 million fee to extend the revolver, a $1.25 million fee for the bridge loan extension and a $1 million fee for the Gulfstream Park facility.

The Aurora, Ont., racetrack operator reiterated that although it is continuing to implement its debt elimination plan the real estate and credit markets have continued to demonstrate weakness and it does not expect it will be able to complete asset sales at acceptable prices as quickly as originally contemplated or raise as much as anticipated.

As a result, the upcoming debt maturities and operational funding requirements mean Magna will again need to seek extensions or additional funds in the short-term from one or more possible sources.

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