RESTRUCTURING
Magna Entertainment Corporation has filed for bankruptcy protection in the United States and Canada because of mounting debt and interest expense.
The Canadian horse racecourse operator said on Wednesday its daily operations will not change while the company undergoes a reorganization. XpressBet, the company’s account wagering company, is not included in the Chapter 11 filing, the company said.
“Simply put, MEC has far too much debt and interest expense,” said Frank Stronach, the company’s chairman and chief executive, in a company statement. “MEC has previously pursued numerous out-of-court restructuring alternatives but has been unable to complete a comprehensive restructuring to date due, in part, to the current economic recession, severe downturn in the U.S. real estate market and global credit crisis.”
Mr. Stronach emphasized in his statement that the voluntary filing is intended to utilize the Chapter 11 process, which he said will allow the company “to operate the business uninterrupted while we implement a reorganization in a court-supervised environment.”
“We expect that all employees, customers and horsemen will continue to be paid in the normal course along with all post-petition vendor obligations,” he added.
STAKE OUT
Sportsbet, an online sports book in Australia’s Northern Territory, has purchased a 12.3 percent stake in International All Sports Ltd., or IAS, Bloomberg reports.
According to the Australian Financial Review, Sportsbet will use the new stake to impact the future of IAS.
Following Centrebet International Ltd.’s hostile takeover bid to acquire a substantial stake in IAS, the Melbourne company posted its half-year results last month with a 2.75 percent year-over-year increase in turnover, and its pre-tax net profit soared 664 percent year over year.
WEEDING OUT?
Banks could be leaving online gamblers applying for mortgages out in the cold, reports the Irish Times.
“The banks will never admit it,” Michael Dowling, spokesperson for the Independent Mortgages Advisers Federation, told the Times. “It is . . . being discussed . . . I don’t think online gambling is to be encouraged if people are making a mortgage application, in particular if there are regular amounts going out.”
Mr. Dowling also told the British Broadcasting Corporation that some banks will subtract the money gambled from applicants’ gross income and reduce the amount that can be borrowed.