Monday, November 17, 2008
Magna Update: A Shorter Leash
In yet another sign that time is running out for Magna Entertainment, the company announced today that it had secured one more extension of its $40 million revolving credit loan from the Bank of Montreal. But the real news was that, instead of the one-month extensions that Magna had been able to get the past few months, this one was for only 11 days, until next Friday, November 28th.
For those few days of grace, Magna had to pay another $250,000 in fees, as they have each time the loan has been extended recently. Looking at their balance sheet, I'm not sure where they were able to find even that much spare cash.
Everyone knows that Magna doesn't have the cash to pay off the loan, to say nothing of the $200 million-plus that Magna Entertainment -- the race track company -- owes to its parent, MI Developments. My guess, and it's only a guess, is that Magna Entertainment's new bankruptcy advisors, Miller Buckfire & Co., have found some asset that they think they can sell off, albeit at a fire-sale price, in the next 10 days.
In a related development, brought to my attention by Terry Bjork on the Derby email list, the Fort Lauderdale Sun-Sentinel reports that Forest City Enterprises, Frank Stronach's partner in developing what is supposed to be some 70 stores, 500 condo units and a 500-room hotel in what used to be Gulfstream Park's lovely paddock area, is seeking a $2 million tax rebate from the city of Hallandale. Unless the city forks over the cash, the newspaper reports, the development would be "a rather ordinary entertainment center." Hell, that's better than most things Stronach touches.