11/18/2008 12:00AM

Magna receives extension on $40M loan


Magna Entertainment Corp., the struggling owner-operator of 10 U.S. racetracks, has reached an agreement to extend by 11 days the maturity date of a $40 million loan with the Bank of Montreal, the company announced late on Monday.

The 11-day extension follows four previous one-month extensions to the credit line. The maturity date of the line is now Nov. 28. Magna paid the Bank of Montreal $250,000 for the extension, according to a release from the company.

The shortened term of the most recent extension indicates that Magna's debt is becoming more problematic. The company has $250 million in debt that was due this year, but the loans have not been repaid. The other $210 million, which is owed to its parent company, MI Developments, comes due on Dec. 1.

Two weeks ago, Magna hired a company specializing in bankruptcy reorganizations as a financial adviser. Magna has lost $400 million over the past four years.