MI Developments not proceeding with previously-announced reorganization proposal
February 18 2009 - 7:40PM
PR Newswire (US)
AURORA, ON, Feb. 18 /PRNewswire-FirstCall/ -- MI Developments Inc.
(MID) (TSX: MIM.A, MIM.B; NYSE: MIM) today announced that it is not
proceeding with the reorganization proposal announced on November
26, 2008. As a result of, among other things, current global
economic conditions, the continued disruptions in the financial
markets and ongoing uncertainty in the automotive industry, MID has
determined that it is unlikely that it will be able to arrange the
new debt financing associated with the proposal. Although the
proposal contemplated the possibility that the new debt could be
arranged after closing, MID does not believe that it would be
prudent to raise the new debt until such time as the ongoing
uncertainty in the automotive industry has been resolved. MID is in
discussions with Magna Entertainment Corp. (MEC) concerning
alternatives with respect to its investment in MEC. In accordance
with the terms of the respective loan agreements, the maturity date
of the first tranche of the new loan that MID made available to MEC
on December 1, 2008 in connection with the reorganization proposal
(the "New Loan"), the maturity date of the bridge loan and the
deadline for repayment of US$100 million under the Gulfstream
project financing will each be accelerated to March 20, 2009. The
maturity date of the second tranche of the New Loan has already
been accelerated to May 13, 2009. As of February 18, 2009, there is
approximately US$48.5 million outstanding under the first tranche
of the New Loan, approximately US$0.7 million outstanding under the
second tranche of the New Loan, and approximately US$126.2 million
outstanding under the bridge loan. In accordance with its terms,
the maturity date of MEC's credit facility with a Canadian
chartered bank will also accelerate to March 5, 2009. MID cautions
shareholders and others considering trading in securities of MID
that there can be no assurance that any alternative transaction
with respect to MID's investments in MEC will be completed. About
MID MID is a real estate operating company focusing primarily on
the ownership, leasing, management, acquisition and development of
a predominantly industrial rental portfolio for 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 controlling interest in MEC,
North America's number one owner and operator of horse racetracks,
based on revenue, and one of the world's leading suppliers, via
simulcasting, of live horse racing content to the growing
intertrack, off-track and account wagering markets. 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 reorganization proposal and the terms and
conditions of such proposal. 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 that: if the parties decide to proceed with a
transaction, the terms of such transaction may differ from those
that were contemplated by the reorganization proposal; if the
parties decide to proceed with a transaction, such transaction may
not be successfully completed for any reason (including the failure
to obtain any required approvals); and are set forth in the "Risk
Factors" section in MID's Annual Information Form for 2007, filed
on SEDAR at http://www.sedar.com/ and attached as Exhibit 1 to
MID's Annual Report on Form 40-F for the year ended December 31,
2007, 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. DATASOURCE: MI Developments
Inc. CONTACT: Richard Smith, Executive Vice-President and Chief
Financial Officer, at (905) 726-7507
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