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View Full Version : Magna gets 11-day extension on $40 Million Debt


rrbauer
11-18-2008, 04:18 PM
Due date extended from yesterday, November 17 until Friday, November 28 (called Black Friday in some circles!). They paid $250K to get the extension. I guess there will be a restructuring of this credit arrangement, but with his tracks producing losses and his real estate valuations taking it in the shorts and his automotive subsidiaries tied to Detroit where could Frankie get the $40 Million anyway?

http://phx.corporate-ir.net/phoenix.zhtml?c=98631&p=irol-newsArticle&ID=1227553&highlight=

Steve 'StatMan'
11-18-2008, 06:33 PM
... and his automotive subsidiaries tied to Detroit where could Frankie get the $40 Million anyway?

The Canadian Government? (half-kidding) I don't know if his auto-parts company manufactures mainly in Canada or the U.S., and if Detroit/U.S. Auto Industry Crisis is likely to kill off a number of Canadian businesses and jobs as well as U.S. companies and jobs.

Steve 'StatMan'
11-18-2008, 06:37 PM
The Canadian Government? (half-kidding) I don't know if his auto-parts company manufactures mainly in Canada or the U.S., and if Detroit/U.S. Auto Industry Crisis is likely to kill off a number of Canadian businesses and jobs as well as U.S. companies and jobs.

Whoops. My bad. Magna Entertainment (race tracks & casinos) is the only part of the entity involved with this, not the car parts and other segments of Magna/Stronach's holdings.

rrbauer
11-18-2008, 06:48 PM
Whoops. My bad. Magna Entertainment (race tracks & casinos) is the only part of the entity involved with this, not the car parts and other segments of Magna/Stronach's holdings.

Well, the only reason for including Frankie and his Magna auto industry ties is that that is the only piece of the pie that has unencumbered liquid assets (Read: Cash) and it's questionable if there's enough there to do this bailout. But, if they restructure then then it simply extends judgement day.

garyoz
11-18-2008, 07:41 PM
The $250k would eventually end up with the creditors anyway. What will happen is the debt will accelerate and be payable in full. Not sure of the corporate structure of MECA. This sounds like a revolver for the holding company--likely only secured by the equity of the holding company--assuming that MECA has operating subsidiaries of each of its tracks. Next step would be Chapter 11 at the holding company level--then things get complicated. If you want to take the time to read the 10-K you can figure out the corporate structure. No financing available out in the marketplace

Spectacular Sid
11-18-2008, 09:35 PM
I think Frank's got his son Andy playing the slots at Gulfstream 24/7 hoping to hit the jackpot so they can pay off that loan.

Fingal
11-19-2008, 11:26 AM
11 days - 11 years. It ain't gonna make a difference. The only way MAGNA survives is with Frank & his ego out of the picture.

NoCal Boy
11-19-2008, 12:34 PM
There is nothing short of a sale of Santa Anita to the Native American tribe or Gulfstream to someone that will salvage some semblence of the current Magna. There is simply too much debt on the books. The only other viable option, and very likely the only realistic option, is for Magna to reorganize either in Chapter 11 or out of it with its affiliate/lender MI Developments.

It will help if Tracknet gets a deal done with the horsemen today, but only from a more global perspective once Magna's debt is reorganized and taken care of in some fashion.

witchdoctor
11-19-2008, 05:09 PM
A well place source tells me that the horsemen are close to announcing that they are buying Remington Park and Casino.

cj
11-19-2008, 05:43 PM
A well place source tells me that the horsemen are close to announcing that they are buying Remington Park and Casino.

I'll believe it when I see it. It would be interesting to see a bunch of guys that can barely manage a few horses try to run a track.

rrbauer
11-26-2008, 03:43 PM
Follow the bouncing ball:

http://phx.corporate-ir.net/phoenix.zhtml?c=98631&p=irol-newsArticle&ID=1230527&highlight=

http://news.bloodhorse.com/article/48214.htm

http://www.reportonbusiness.com/servlet/story/RTGAM.20081126.wmec1126/BNStory/Business/?page=rss&id=RTGAM.20081126.wmec1126

http://www.reportonbusiness.com/servlet/story/RTGAM.20081126.wmagnaent1126/BNStory/Business/?page=rss&id=RTGAM.20081126.wmagnaent1126

garyoz
11-26-2008, 04:17 PM
The bouncing ball is not very impressive. MECA paid around a 13% fee (on an annualized basis) in order to extend a credit line of $40mm, not even to borrow. Shylock would approve. That is a cash payment of $1.5mm just to have the ability to borrow. My guess is CDSN buys TVG then everyone falls in line. How much can slots from Laurel really help?

Cangamble
11-26-2008, 04:22 PM
What is Azalea Trust? They buy 21% of MEC and say they will sell as soon as possible and give profits to charity??????

miesque
11-26-2008, 04:58 PM
What is Azalea Trust? They buy 21% of MEC and say they will sell as soon as possible and give profits to charity??????

This makes this whole saga even more interesting and the net impact is that a very large chunk of stock is actively "for sale" to the highest bidder. The stock was "privately acquired" which could mean from one source or multiple sources, maybe this was a way to quietly amass a sizeable chunk of stock to flip to a pre-determined party. There are obviously some stealthy maneuvering going on so I am curious to see how this will actually play out.

miesque
11-26-2008, 05:15 PM
Is it possible that the Trust made the announcement regarding gains being donated to charity as a potential "disgorgement of profits"?

rrbauer
11-26-2008, 05:19 PM
Is it possible that the Trust made the announcement regarding gains being donated to charity as a potential "disgorgement of profits"?

Disgorgement of a bad deal is more like it! If anyone comes near me with MEC stock, I'm calling 911!

startngate
11-26-2008, 05:46 PM
According to this the Azalea deal was a private agreement.

http://biz.yahoo.com/cnw/081125/azalea_acquires_share.html?.v=1

This leads me to guess that Azalea is somehow an 'insider'. If Azalea knew the stock would spike, it probably had to issue the "disgorgement of profits" statement because of it.

Sorry Miesque .. you posted while I was in the middle of this, and I agree with you.

Interesting that this is a similar proposal to what was brought forth before and strongly rejected by the minority shareholders of MID. It's also reportedly a worse deal for the shareholders than what Halsey Minor put on the table.

Minor apparently also claims that Mills stood him up today, and is none to happy about it.

http://www.paulickreport.com/blog/minor-calls-magna-proposal-preposterous/

This will be fun to watch ... :)

takeout
11-27-2008, 09:55 AM
Minor apparently also claims that Mills stood him up today, and is none to happy about it.They might be standing up the ONLY guy that actually wants in on that train wreck.