08/14/2008 12:00AM

Magna reschedules loans


Magna Entertainment Corp., the struggling racetrack owner and operator, has reached several agreements to extend the maturity dates of three loans totaling $250 million by one month each, the company announced late on Wednesday.

Magna has two large loans that were previously due to its parent company, MI Developments, by Aug. 31. The debts include a $69.4 million loan for operations and $100 million of a $172 million debt to finance the renovation of Gulfstream Park in Florida, a project that was completed in 2006. The maturity dates of both debts have now been extended until Sept. 30, the company said.

In addition, Magna has a $40 million debt to a Canadian bank that was scheduled to come due on Aug. 15. The maturity date of that loan has been extended to Sept. 15, Magna said. The maturity date of the loan has been extended three times already this year. The bank debt is bearing interest at a rate of 16.2 percent annually, according to Magna's financial documents.

Magna has $550 million in debt. The company has lost more than $500 million over the past four years and its market capitalization, approximately $45 million, is a fraction of the $1.2 billion value of the assets on its balance sheet.

In a recent conference call with analysts, Magna's chairman, Frank Stronach, said that the company may need to explore selling some of its high-profile tracks in order to address its financial difficulties. In addition to Gulfstream, Magna owns Santa Anita Park, Golden Gate Fields, Laurel Park, Pimlico Race Course, Remington Park, and the operating assets of Lone Star Park.