MID announces conditional amendment to Magna Entertainment DIP loan

    AURORA, ON, Aug. 26 /CNW/ - MI Developments Inc. (MID) (TSX: MIM.A,
MIM.B; NYSE:   MIM) today announced that the terms of the secured
debtor-in-possession financing facility being provided by a wholly-owned
subsidiary of MID to Magna Entertainment Corp. and certain of its subsidiaries
(MEC) have been conditionally amended to, among other things, increase the
principal amount available thereunder by up to US$28 million from up to
US$38.4 million to up to US$66.4 million and extend the maturity from November
2, 2009 to April 30, 2010 (the "Amended DIP Financing").
    Under the Amended DIP Financing, MEC must use its best efforts to market
and sell all its assets, including seeking stalking horse bidders, conducting
auctions and obtaining sales orders from the U.S. Bankruptcy Court. MID has
indicated that it does not intend to bid on any of the following MEC assets:
AmTote International, Inc., Dixon, Lone Star Park, Ocala, Portland Meadows,
Remington Park, Thistledown or XpressBet, Inc. With respect to Golden Gate
Fields, Gulfstream Park, Maryland Jockey Club and Santa Anita Park, MID has
indicated that it is continuing to evaluate all of its alternatives, which may
include MID entering into a stalking horse purchase agreement for one or more
of such assets in the event that MEC receives no other stalking horse bids
acceptable to MEC.
    If certain asset sale milestones are not satisfied, there will be an
event of default and/or an additional arrangement fee will be payable by MEC.
The other fees and the interest rate payable by MEC to MID under the Amended
DIP Financing will remain the same as under the current debtor-in-possession
financing facility.
    All advances under the Amended DIP Financing must be made in accordance
with an approved budget. No advances under the Amended DIP Financing will be
made prior to October 1, 2009. In addition, the Amended DIP Financing is
subject to (i) the Ontario Securities Commission having held its hearing
currently scheduled to commence on September 9, 2009 regarding MID's ability
to rely on certain exemptions under Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special Transactions, and rendering
a decision in favour of MID at or following the conclusion of that hearing and
(ii) MEC obtaining the entry of an order by the U.S. Bankruptcy Court
approving the Amended DIP Financing.
    The Board of Directors of MID approved the Amended DIP Financing after
considering, among other things, a favourable recommendation from a Special
Committee of independent directors, which received independent financial and
legal advice. The restructuring of MEC under the protection of Chapter 11 is
subject to certain material conditions, some of which are beyond MEC's and
MID's control.

    About MID

    MID is a real estate operating company engaged primarily in the
acquisition, development, construction, leasing, management, and ownership of
a predominantly industrial rental portfolio leased primarily to Magna
International Inc. and its subsidiaries in North America and Europe. MID also
acquires land that it intends to develop for mixed-use and residential
projects. MID holds a majority equity interest in MEC, an owner and operator
of horse racetracks, and a supplier, via simulcasting, of live horseracing
content to the inter-track, off-track and account wagering markets. MEC has
filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code.

    Forward-Looking Statements

    This press release contains "forward-looking statements" within the
meaning of applicable securities legislation. Forward-looking statements may
include, among others, statements relating to the chapter 11 proceedings and
MID's participation therein. Words such as "may", "would", "could", "will",
"likely", "expect", "anticipate", "believe", "intend", "plan", "forecast",
"project", "estimate" and similar expressions are used to identify
forward-looking statements. Forward-looking statements should not be read as
guarantees of future events or results and will not necessarily be accurate
indications of whether or the times at or by which such future events 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, and are
subject to known and unknown risks, uncertainties and other unpredictable
factors, many of which are beyond the Company's control, that could cause
actual events or results to differ materially from such forward-looking
statements. Important factors that could cause such differences include, but
are not limited to, the risks and uncertainties inherent in MEC's Chapter 11
process, including the auction of MEC's assets, that there is no certainty
with regard to how long the Chapter 11 proceedings or the process for the
marketing and sale of the debtors' assets will take, whether the debtors'
restructuring plan will be successful, whether or at what prices the debtors'
assets will be sold, whether any offer by any third party or MID for the
debtors' assets will materialize or be successful, as to the outcome of
litigation or regulatory proceedings, if any, related to the Chapter 11
proceedings or MID's involvement therein (including as a result of objections
raised at the U.S. Bankruptcy Court and with the Ontario Securities
Commission), and the risks that are set forth in the "Risk Factors" section in
MID's Annual Information Form for 2008, filed on SEDAR at www.sedar.com and
attached as Exhibit 1 to MID's Annual Report on Form 40-F for the year ended
December 31, 2008, which investors are strongly advised to review. The "Risk
Factors" section also contains information about the material factors or
assumptions underlying such forward-looking statements. Forward-looking
statements speak only as of the date the statements were made and unless
otherwise required by applicable securities laws, MID expressly disclaims any
intention and undertakes no obligation to update or revise any forward-looking
statements contained in this press release to reflect subsequent information,
events or circumstances or otherwise.

For further information:

For further information: about this press release, please contact
Richard Crofts, MID's Executive Vice-President, Corporate Development, General
Counsel and Secretary, at (905) 726-7505

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