Magna gets extension on payback of loans

Magna Entertainment Corp. has once again reached agreements with its lenders to extend the payback dates for $250 million in loans, incurring $2.65 million in expenses in the process.

Magna has received one-month extensions to push back the maturity dates of the loans ever since they began coming due in the spring. The company, which owns Santa Anita Park, Gulfstream Park, Golden Gate Fields, and several other racetracks, has lost $500 million over the past five years and holds $500 million in debt. Its stock has lost 99 percent of its value since late 2006, and on Wednesday closed at $1.25.

The loans include a $40 million line of credit from the Bank of Montreal that will now be due on Nov. 17; a $110 million loan from its parent company and controlling shareholder, MI Developments, that will now be due on Dec. 1; and a $100 million debt obligation to MI Developments that has also been pushed to Dec. 1.

In a release, Magna said that the penalty to extend the Canadian loan was $400,000, and that the penalties to extend the other two loans were $2.25 million.