Meadows sale completed

Magna Entertainment Corp. (MEC) announced Tuesday that it had completed the sale of The Meadows to PA Meadows LLC, a company owned by Cannery Casino Resorts LLC. PA Meadows LLC made a payment of $175 million in cash and delivered a $25 million holdback agreement, in full satisfaction of the notes issued to MEC on July 26, 2006.

The $25 million holdback is payable to MEC over a five-year period, subject to other obligation conditions. Payments under the holdback will be deferred until the opening of a permanent casino at The Meadows.

Cannery Casino Resorts is owned by Millennium Gaming Inc. (which is jointly owned by William Paulos and William Wortman) and an entity managed by Oaktree Capital Management. They plan to break ground on the construction of the new slots facility at The Meadows on Thursday.

According to Paulos, Magna Entertainment will manage the racing operation at The Meadows, subject to certain performance conditions.

In a press release, Blake Tohana, executive vice president and chief financial officer of MEC, said, "We are extremely pleased that The Meadows sale transaction has now closed. The collection of our $175 million note has enabled MEC to significantly reduce its outstanding debt and strengthen its balance sheet. The completion of this sale brings MEC's total consideration generated from asset sales over the past 14 months to approximately $368 million. We remain focused on pursuing further asset sales and debt reduction opportunities."

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