Odds On Racing - Harness Racing

Meadows Sale Approved

Max 20, 2006

This story originally appeared in The Toronto Star on Friday, May 19, 2006
Magna Entertainment Corp. said Friday that the Pennsylvania State Harness Racing Commission has conditionally approved its sale of The Meadows. The sale of the Pittsburgh harness racing track would provide $225 million in sorely needed funds for debt-handicapped Magna Entertainment. The Meadows transaction still depends on another major condition — receipt of a slot-machine licence.

Magna Entertainment, which lost $2.2 million US in the January-March quarter on revenue of $281.5 million, said Friday it looks forward to the racing commission's final approval of the sale to Millennium Gaming Inc. and Oaktree Capital Management.

The timing of the deal announced in November, which includes a five-year management contract for Magna Entertainment, is crucial for the company as it faces the July 31 expiry of its senior debt line and the Aug. 31 expiry of a bridge loan from parent MI Developments Inc.

Magna Entertainment noted May 1 that the closing date of the Meadows sale is "largely dependent on the applicable Pennsylvania regulatory approval process," and it is "uncertain that closing will occur prior to the current maturity dates of the MID bridge loan and senior secured credit facility."

Blake Tohana, Magna Entertainment's chief financial officer, stated Friday that management is "continuing to work with Millennium-Oaktree to satisfy the remaining closing conditions and to complete the stock purchase transaction, which is expected to enable MEC to significantly reduce our outstanding debt and strengthen our balance sheet."