TORONTO - Magna Entertainment Corp. (TSX:MEC.A) said Tuesday its class A shares will be delisted at the close of the market on April 1 for failing to meet the Toronto Stock Exchange's listing requirements.
The company, which owns horse racing tracks, betting establishments and related businesses, is controlled by auto parts magnate Frank Stronach through MEC's class B multiple vote shares.
Last week, Magna Entertainment said it has received notice from its lenders that several of its subsidiaries, including Pimlico Racing Association Inc., Laurel Racing Association Limited Partnership, Laurel Racing Assoc. Inc. and the Maryland Jockey Club of Baltimore City Inc. are in default under its PNC Bank loan agreement.
PNC Bank also said it had chosen not to exercise its rights under the agreement at that time, but could choose to do so later.
MEC has also announced that it has not met certain financial covenants on a US$40-million credit facility provided by Wells Fargo Bank, National Association and a Canadian chartered bank.
Meanwhile, MI Developments Inc. (TSX:MIM.A) cancelled plans last month that would have seen the company disentangle itself from MEC, currently MID's subsidiary.
MID, the property management spinoff of auto parts maker Magna International (TSX:MG.A), said it was unlikely that it would be able to arrange the new debt financing associated with the proposal given the turmoil in the financial markets and the automotive industry.
MID, which is also controlled by Stronach, said it was in talks with Magna Entertainment concerning alternatives.
Outside investors in MI Developments have been fighting for years for it to jettison Magna Entertainment.
Magna Entertainment shares were unchanged at 35 cents with minimal trading Tuesday on the TSX. The stock's 52-week high of $17 was set last March.
