Magna Entertainment Corp. Announces Amendments and Extensions of Financing Arrangements



    AURORA, ON, Aug. 13 /CNW/ - Magna Entertainment Corp. ("MEC" or the
"Company") (NASDAQ:   MECAD; TSX: MEC.A) today announced that it has amended
certain of its financing agreements including:

    
    -   extending the maturity date of its $40 million senior secured
        revolving credit facility (the "Senior Bank Facility") with a
        Canadian chartered bank from August 15, 2008 to September 15, 2008;

    -   extending the maturity date of its bridge loan facility (the "Bridge
        Loan") with a subsidiary (the "MID Lender") of MI Developments Inc.
        ("MID"), MEC's controlling shareholder, from August 31, 2008 to
        September 30, 2008; and

    -   extending the due date of its $100 million repayment requirement
        under the Gulfstream Park project financing with the MID Lender from
        August 31, 2008 to September 30, 2008 (during which time any
        repayments will not be subject to a make-whole payment).
    

    MEC incurred a fee of $0.4 million in connection with the extension of
the Senior Bank Facility and a fee of $0.5 million in connection with the
extension of the Bridge Loan.

    Consideration of the amendments to the financing arrangements with the
MID Lender was supervised by the Special Committee of MEC's board of directors
consisting of Jerry D. Campbell (Chairman), Anthony J. Campbell and William J.
Menear. The approval of MEC's board followed a favorable recommendation of the
Special Committee.

    MEC will file a material change report as soon as practicable after
issuing this press release. The material change report will be filed less than
21 days prior to the closing of the loan amendments. The timing of the
material change report is, in MEC's view, both necessary and reasonable
because the terms of the amendments were settled and approved by MEC's board
of directors on August 13, 2008 and MEC requires immediate funding to address
its short-term liquidity needs.

    MEC, North America's largest owner and operator of horse racetracks,
based on revenue, develops, owns and operates horse racetracks and related
pari-mutuel wagering operations, including off-track betting facilities. MEC
also develops, owns and operates casinos in conjunction with its racetracks
where permitted by law. MEC owns and operates AmTote International, Inc., a
provider of totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well as
MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty
percent interest in HorseRacing TV(R), a 24-hour horse racing television
network, and TrackNet Media Group LLC, a content management company formed for
distribution of the full breadth of MEC's horse racing content.

    This Report contains "forward-looking statements" within the meaning of
applicable securities legislation, including Section 27A of the United States
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act") and forward-looking information as defined in the Securities Act
(Ontario) (collectively referred to as forward-looking statements). These
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and the Securities Act
(Ontario) and include, among others, statements regarding: our debt reduction
plans and efforts, including the current status and the potential impact of a
debt elimination plan (the "Plan"), as to which there can be no assurance of
success; expectations as to our ability to complete asset sales as
contemplated by the Plan or otherwise (including, without limitation, the
timing or pricing of such sales); the impact of the Bridge Loan; expectations
as to our ability to comply with the Bridge Loan and other credit facilities;
our ability to continue as a going concern; strategies and plans; expectations
as to financing and liquidity requirements and arrangements; expectations as
to operations; expectations as to revenues, costs and earnings; the time by
which certain redevelopment projects, transactions or other objectives will be
achieved; estimates of costs relating to environmental remediation and
restoration; proposed developments, products and services; expectations as to
the timing and receipt of government approvals and regulatory changes in
gaming and other racing laws and regulations; expectations that claims,
lawsuits, environmental costs, commitments, contingent liabilities, labor
negotiations or agreements, or other matters will not have a material adverse
effect on our consolidated financial position, operating results, prospects or
liquidity; projections, predictions, expectations, estimates, beliefs or
forecasts as to our financial and operating results and future economic
performance; and other matters that are not historical facts.

    Forward-looking statements should not be read as guarantees of future
performance or results, and will not necessarily be accurate indications of
whether or the times at or by which such performance or results will be
achieved. Undue reliance should not be placed on such statements.
Forward-looking statements are based on information available at the time
and/or management's good faith assumptions and analyses made in light of our
perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in the
circumstances and are subject to known and unknown risks, uncertainties and
other unpredictable factors, many of which are beyond our control, that could
cause actual events or results to differ materially from such forward-looking
statements. Important factors that could cause actual results to differ
materially from our forward-looking statements include, but may not be limited
to, material adverse changes in: general economic conditions; the popularity
of racing and other gaming activities as recreational activities; the
regulatory environment affecting the horse racing and gaming industries; our
ability to obtain or maintain government and other regulatory approvals
necessary or desirable to proceed with proposed real estate developments;
increased regulation affecting certain of our non-racetrack operations, such
as broadcasting ventures; and our ability to develop, execute or finance our
strategies and plans within expected timelines or budgets. In drawing
conclusions set out in our forward-looking statements above, we have assumed,
among other things, that we will continue with our efforts to implement our
September 12, 2007 adopted plan to eliminate the Company's debt, although not
on the originally contemplated time schedule, and comply with the terms of
and/or obtain waivers or other concessions from our lenders and refinance or
repay on maturity our existing financing arrangements (including our Bridge
Loan and our senior secured revolving credit facility with a Canadian
financial institution), and there will not be any material adverse changes in:
general economic conditions; the popularity of horse racing and other gaming
activities; weather and other environmental conditions at our facilities; the
regulatory environment; and our ability to develop, execute or finance our
strategies and plans as anticipated.

    Forward-looking statements speak only as of the date the statements were
made. We assume no obligation to update forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
forward-looking statements. If we update one or more forward-looking
statements, no inference should be drawn that we will make additional updates
with respect thereto or with respect to other forward-looking statements.

    

SOURCE Magna Entertainment Corp.

For further information:

For further information: Blake Tohana, Executive Vice-President and
Chief Financial Officer, Magna Entertainment Corp., 337 Magna Drive, Aurora,
ON, L4G 7K1, Tel: (905) 726-7493

Organization Profile

MAGNA ENTERTAINMENT CORP.

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