Magna Entertainment Corp. Announces Closing of Offering of U.S. $100 Million of Convertible Subordinated Notes
AURORA, ON, June 2 - Magna Entertainment Corp. ("MEC") (NASDAQ:
MECA; TSX: MEC.A) announced today that it has completed its previously
announced sale of U.S.$100 million aggregate principal amount of 8.55%
Convertible Subordinated Notes due June 15, 2010.
The Notes will bear interest at 8.55% per annum and will be convertible
into shares of MEC's Class A Subordinate Voting Stock at a conversion price of
U.S.$7.05 per share, subject to customary antidilution adjustments. The Notes
will be redeemable on or after June 2, 2006 at any time in whole or in part at
MEC's option at a redemption price equal to the principal amount of the Notes
plus accrued and unpaid interest to the date of redemption; provided that, in
connection with any redemption occurring on or after June 2, 2006 and before
June 2, 2008, the closing price of MEC's Class A Subordinate Voting Stock has
exceeded 125% of the conversion price for at least 20 trading days in the 30
consecutive trading day period ending on the trading day prior to the mailing
of the redemption notice.
The net proceeds to MEC from the offering, after deducting the initial
purchaser's commission and offering expenses, are approximately
U.S.$96.5 million. MEC intends to use the net proceeds for general corporate
purposes, including capital expenditures.
MEC, North America's number one owner and operator of horse racetracks,
acquires, develops and operates horse racetracks and related pari-mutuel
wagering operations, including off-track betting facilities. Additionally, MEC
owns and operates XpressBet(TM), a national Internet and telephone account
wagering system, and HorseRacing TV(TM), a 24-hour horse racing television
network. |
