MEC Losses Mount in Third Quarter
by Blood-Horse Staff
Date Posted: 11/6/2008 9:07:37 AM
Last Updated: 11/7/2008 2:01:36 PM
Magna Entertainment Corp. reported Nov. 6 a $48.4 million dollar loss in its third financial quarter and announced a financial adviser had been hired to possibly sell one of its core racetracks.
MEC, which reported its collective loss year-to-date is $116.1 million, additionally has lost $306.5 million the last three years, and is struggling with a capital deficiency of $195.4 million and a debt-load of $255.4 million that was due to mature at the end of the quarter, Sept. 30.
The company in a news release did not say it would hold a conference call to discuss the earnings report with analysts and investors. Frank Stronach, MEC's chairman and chief executive officer, said in the release that the company is still facing an uphill battle.
"Although MEC has a strong asset base, we remain burdened with far too much debt and interest expense," he said. "Our previously announced debt elimination plan has been negatively affected by the weak real estate and credit markets, which have impacted our ability to sell non-core assets.
"As a result, we are evaluating MEC's core operations with a view to possibly selling or joint venturing one or more of MEC's core racetracks in order to strengthen MEC's balance sheet and liquidity position."
The company announced it had hired Miller Buckfire & Co. to "review and evaluate various strategic alternatives including additional asset sales, financing, and balance sheet restructuring opportunities," among other initiatives.
"Although the weak economy will continue to present challenges in the near-term, we are very conscious of the fact that we must significantly improve our operating results," Stronach said.
The company said it will continue to seek extensions on the near-term loans, which are due to mature in the next week or so.
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