Following a transition period, MI Developments chief executive officer and board member John Simonetti said he will leave his post, but he offered no timeline Aug. 8 during a conference call on the company’s second-quarter earnings.
Simonetti has been with MID since its spin-off from Magna International in 2003. MID is a real-estate operating company that focuses on the ownership, lease, management, acquisition, and development of predominantly industrial rental properties for Magna International and its subsidiaries. The company also holds controlling interest in Magna Entertainment Corp., the racetrack operator that carries more than $500 million in debt.
“Over the past three years, I have spend an enormous amount of time and energy dealing with issues relating to how our company is structured and operated, and our investment in MEC,” Simonetti said in a statement. “It has been frustrating that, despite these efforts, we haven’t been able to broker a compromise solution among our shareholders. Accordingly, I thought it best that I leave MID and return to (Magna International).”
During the conference call, Simonetti said reiterated his concerns that a reorganization of MID hasn’t moved forward. The proposal, issued March 31, would have 80% of MID owned by former public shareholders, 10% by an entity headed by Magna chairman Frank Stronach, and 10% by Magna International. In addition, MID’s controlling equity investment in MEC, of which Stronach is chairman, would be sold to Stronach for $25 million.
“Maybe a new face needs to talk to the shareholders to get something done,” Simonetti said during the conference call. “I will say once again it’s unfortunate that at this time we’ve been unable to come to a solution.”
Simonetti didn’t say when he would step down, but indicated he would return to the automobile parts business at Magna International.
In the second quarter of 2008, MID had net income of $26.3 million, up 22% from $21.5 million for the same period in 2007. Revenue of $55.5 million was up 20% from $46.1 million, the company reported.
Net income from continuing operations for the first six months of 2008 was $50.2 million, up from $32.8 million for the same period in 2007. Six-month revenue was $109.3 million, up from $90.8 million.