MID announces conditional amendment to Magna Entertainment DIP loan
26 August 2009 - 3:21PM
PR Newswire (US)
AURORA, ON, Aug. 26 /PRNewswire-FirstCall/ -- MI Developments Inc.
(MID) (TSX: MIM.A, MIM.B; NYSE: MIM) today announced that the terms
of the secured debtor-in-possession financing facility being
provided by a wholly-owned subsidiary of MID to Magna Entertainment
Corp. and certain of its subsidiaries (MEC) have been conditionally
amended to, among other things, increase the principal amount
available thereunder by up to US$28 million from up to US$38.4
million to up to US$66.4 million and extend the maturity from
November 2, 2009 to April 30, 2010 (the "Amended DIP Financing").
Under the Amended DIP Financing, MEC must use its best efforts to
market and sell all its assets, including seeking stalking horse
bidders, conducting auctions and obtaining sales orders from the
U.S. Bankruptcy Court. MID has indicated that it does not intend to
bid on any of the following MEC assets: AmTote International, Inc.,
Dixon, Lone Star Park, Ocala, Portland Meadows, Remington Park,
Thistledown or XpressBet, Inc. With respect to Golden Gate Fields,
Gulfstream Park, Maryland Jockey Club and Santa Anita Park, MID has
indicated that it is continuing to evaluate all of its
alternatives, which may include MID entering into a stalking horse
purchase agreement for one or more of such assets in the event that
MEC receives no other stalking horse bids acceptable to MEC. If
certain asset sale milestones are not satisfied, there will be an
event of default and/or an additional arrangement fee will be
payable by MEC. The other fees and the interest rate payable by MEC
to MID under the Amended DIP Financing will remain the same as
under the current debtor-in-possession financing facility. All
advances under the Amended DIP Financing must be made in accordance
with an approved budget. No advances under the Amended DIP
Financing will be made prior to October 1, 2009. In addition, the
Amended DIP Financing is subject to (i) the Ontario Securities
Commission having held its hearing currently scheduled to commence
on September 9, 2009 regarding MID's ability to rely on certain
exemptions under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions, and rendering a
decision in favour of MID at or following the conclusion of that
hearing and (ii) MEC obtaining the entry of an order by the U.S.
Bankruptcy Court approving the Amended DIP Financing. The Board of
Directors of MID approved the Amended DIP Financing after
considering, among other things, a favourable recommendation from a
Special Committee of independent directors, which received
independent financial and legal advice. The restructuring of MEC
under the protection of Chapter 11 is subject to certain material
conditions, some of which are beyond MEC's and MID's control. About
MID MID is a real estate operating company engaged primarily in the
acquisition, development, construction, leasing, management, and
ownership of a predominantly industrial rental portfolio leased
primarily to 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
majority equity interest in MEC, an owner and operator of horse
racetracks, and a supplier, via simulcasting, of live horseracing
content to the inter-track, off-track and account wagering markets.
MEC has filed a voluntary petition for reorganization under Chapter
11 of the U.S. Bankruptcy Code. 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
chapter 11 proceedings and MID's participation therein. 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 and
uncertainties inherent in MEC's Chapter 11 process, including the
auction of MEC's assets, that there is no certainty with regard to
how long the Chapter 11 proceedings or the process for the
marketing and sale of the debtors' assets will take, whether the
debtors' restructuring plan will be successful, whether or at what
prices the debtors' assets will be sold, whether any offer by any
third party or MID for the debtors' assets will materialize or be
successful, as to the outcome of litigation or regulatory
proceedings, if any, related to the Chapter 11 proceedings or MID's
involvement therein (including as a result of objections raised at
the U.S. Bankruptcy Court and with the Ontario Securities
Commission), and the risks that are set forth in the "Risk Factors"
section in MID's Annual Information Form for 2008, 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, 2008, 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 Richard
Crofts, MID's Executive Vice-President, Corporate Development,
General Counsel and Secretary, at (905) 726-7505
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