Magna Entertainment sees no reason for stock jump

AURORA, Ontario - Horse track operator Magna Entertainment Corp. said Tuesday it was "not aware" of a specific reason for a sudden jump in the price of its shares, which have doubled since late last week.

The company added that it "continues to consider certain asset sales and solutions to its liquidity situation."

Shares rose another 47 cents, or 13 percent, to close at $3.97 Tuesday. Shares closed at $1.89 on Friday.

In mid-October, Magna Entertainment said it had adjusted its financing arrangements with lenders, but warned it may need further refinancing and had incurred fees for extending its loans.

The company said at the time that it did not expect to be able to complete asset sales as quickly or for the same amounts as it once thought.

Magna had extended the maturity date on a revolving $40 million senior credit facility by a month to Nov. 17.

The company also said its controlling shareholder, MI Developments Inc., would increase the size of a bridge loan facility to $125 million from $110 million and extended the maturity date a month to Dec. 1.

Magna said it also would be allowed to redraw $4.5 million that it repaid to MI in July.

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