MI Developments Inc. said it will extend debtor-in-possession financing for racetrack operator Magna Entertainment Corp. after dropping a bid to purchase company assets under its bankruptcy-protection reorganization.
The amendment will cut Magna Entertainment’s credit line 39 percent to $38.4 million, the Aurora, Ontario-based company said today in a statement distributed by PR Newswire. The loan’s due date is extended two months to Nov. 6 to provide Magna Entertainment more time to sell assets, MI Developments said.
Magna Entertainment, the operator of Pimlico Race Course and six other U.S. horse tracks, sought Chapter 11 bankruptcy protection March 5 after defaulting under a bank-loan agreement. The company listed assets of more than $1 billion and debt of $958.6 million as of Dec. 31 in U.S. Bankruptcy Court in Wilmington, Delaware.
The company, also based in Aurora, Ontario, agreed to hire a restructuring officer April 3 after creditors complained about a proposed asset sale to MI Developments, which is controlled by Magna Entertainment’s chief executive officer, Frank Stronach.
MI Developments, which today dropped its stalking-horse bid, said it will continue to evaluate bidding on Magna Entertainment assets. Final terms of the debtor-in-possession financing are scheduled to be considered by the court today, according to the statement.