MI Developments Announces Amendments to Magna Entertainment Bridge Loan and Project Financing Facilities
September 15 2008 - 7:23AM
PR Newswire (US)
AURORA, ON, Sept. 15 /PRNewswire-FirstCall/ -- MI Developments Inc.
(TSX: MIM.A, MIM.B; NYSE: MIM) today announced that it and one of
its wholly-owned subsidiaries (collectively, "MID") have agreed to
amend the bridge loan (the "Bridge Loan") provided in September
2007 (and amended in May and August 2008) to Magna Entertainment
Corp. ("MEC"), as well as the project financing facilities (the
"Project Financings") provided in connection with MEC's racing and
alternative gaming facilities at Gulfstream Park in Florida and
Remington Park in Oklahoma. The maturity date of the Bridge Loan
will be extended from September 30, 2008 to October 31, 2008. In
addition, MID will extend the deadline for repayment of at least
US$100 million under the Gulfstream Park facility from September
30, 2008 to October 31, 2008 (during which time any repayments made
under either of the Project Financings will not be subject to a
make-whole payment). MID has also agreed to allow MEC to use up to
US$2 million under the Bridge Loan to fund costs associated with
the upcoming Maryland slots referendum. In connection with the
extension of the Bridge Loan, MID will receive an extension fee of
US$527,500. The amendments are conditional on MEC extending the
maturity date of its US$40 million senior secured revolving credit
facility with a Canadian chartered bank from September 15, 2008 to
October 15, 2008. Draws under the Bridge Loan will not be permitted
after October 15, 2008 unless the MEC bank facility has been
further extended or replaced. The MID Board approved the amendments
to the Bridge Loan and the Project Financings after considering,
among other things, a recommendation from a Special Committee of
independent directors. The amendments are intended to provide MID
with time to continue to explore a range of alternatives,
including, without limitation, examining potential amendments to
the reorganization proposal received by the MID Board of Directors
on March 31, 2008 and evaluating whether or to what extent MID
might participate in a recapitalization or restructuring of MEC.
Dennis Mills, MID's Vice-Chairman and Interim Chief Executive
Officer, stated, "This short-term extension of the bridge loan
allows us to remain focused on attempting to develop a compromise
solution that is in the best interests of MID and can be
implemented with the necessary stakeholder support." Neither the
MID Special Committee of independent directors nor the MID Board of
Directors has made any decisions or recommendations with respect to
any reorganization proposal or any other transaction relating to
MID or MEC. There can be no assurance that any reorganization
transaction, or any other transaction relating to MID or MEC, will
be completed. MID will file a material change report immediately
upon filing of this press release. The material change report will
be filed less than 21 days before the date of the closing of the
amendments, which, in MID's view, is both reasonable and necessary
in the circumstances as the terms of the amendments were settled,
and approved by MID's Board of Directors, on September 15, 2008,
and MEC requires immediate funding to address its short-term
liquidity concerns. For more details on the amendments, please
refer to the material change report. In addition, the amendments to
the Bridge Loan and the Project Financings will be filed by MID on
SEDAR at http://www.sedar.com/ and on the SEC's website at
http://www.sec.gov/. 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 the parties may not
proceed with the reorganization proposal delivered to the Company
on March 31, 2008, and if the parties decide to proceed with a
transaction, the terms of such transaction may differ from those
that are currently contemplated by the proposed reorganization.
Other important factors 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: about this press release, please contact Dennis
Mills, MID's Vice-Chairman and Interim Chief Executive Officer, at
(905) 726-7614
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