Magna Entertainment to reorganize

Herald-Leader Staff Report

Magna Entertainment announced on Wednesday a reorganization to recapitalize the racetrack company and spin it off to an ownership group headed by Magna chairman and chief executive Frank Stronach.

The reorganization would be subject to the approval of shareholders and Canadian regulators.

Magna also announced that it has extended a $40 million loan, which was due Nov. 28, to March 16, at a fee of $1.75 million.

The three-stage transaction agreement would begin immediately with as much as $125 million in new loans to finance the pursuit of a video lottery terminal license at Laurel Park in Maryland.

An additional $100 million in loans has been extended to March 31.

According to Magna's announcement, it also has "covenanted to use commercially reasonable efforts to sell or enter into joint ventures in respect of its assets, including its core racetrack assets."

Besides Laurel Park, Magna also owns Pimlico in Maryland, Santa Anita in California, Gulfstream in Florida, and other tracks.