Derby Trail Forums - Magna - one step away from bankruptcy ??

Derby Trail Forums (http://www.derbytrail.com/forums/index.php)

- The Paddock (http://www.derbytrail.com/forums/forumdisplay.php?f=2)

- - Magna - one step away from bankruptcy ?? (http://www.derbytrail.com/forums/showthread.php?t=2280)

Quote:

Originally Posted by Secretariat

i imagine the real estate is equal to the mortgage, he just took out a mortgage to build the place, and he has been borrowing 9 million a month since it was built.
i haven';t seen the balance sheet, but i doubt the underlying equity in the real estate is anything to drastic.
at most, a shot in the dark, hge could get $100,000,000 more than he what he spent on it. that would fund the track for 1 more year. than what ???

he should look into leasing the track, or maybe selling the rights for twenty years to AP for 5 grade1 races.
hmmm, thats an idea, sell the rights to the graded stakes..

Magna's borrowed about $110 million from its parent company (Stronach's auto parts & supplies concern) over the past 18 months. The real estate is appreciating (of course), but there is no top line growth. Good to have a guy like him pouring money into the sport, but I'd rather own something other than Magna Entertainment. It is never a good thing when the CFO jumps. Never.

Quote:

Originally Posted by Secretariat

The point is it gives him leverage. He can sell the property at a nice profit and the government would lose the tax revenue from where the racetrack stood. No racetrack, no revenue. The real money is no longer in the horse racing game, he wan't big casinos, especially in South Florida, which he thinks could be the Las Vegas of the east coast. I think it is brilliant and will work.