QuickLinks -- Click here to rapidly navigate through this documentEXHIBIT 99.1
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Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario,
Canada L4G 7K1
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PRESS RELEASE
MAGNA ENTERTAINMENT CORP. ANNOUNCES THAT IT HAS
AMENDED AND EXTENDED TWO FINANCING AGREEMENTS
AURORA, ON, July 26, 2006 — Magna Entertainment Corp. ("MEC") (NASDAQ: MECA; TSX: MEC.A). today announced that it has amended and extended two financing agreements.
The first amendment is to MEC's senior secured revolving bank credit facility with Bank of Montreal ("BMO"), which amends the credit agreement made as of July 22, 2005 (the "BMO Loan"). The BMO Loan maturity date has been extended from July 31, 2006 to November 6, 2006. The maximum permitted borrowings for general corporate purposes under the BMO Loan have been increased to $50 million. The BMO Loan was also amended to provide for a further increase of $14 million to fund the exercise by MEC of its option to acquire the remaining 70% of AmTote International, Inc. The BMO Loan also requires that MEC repay $39 million upon closing of the sale of The Meadows, after repaying the MID Bridge Loan (as defined below). In connection with the amendments, MEC will pay to BMO a commitment fee of $240,000 (0.375% of the amount of the BMO Loan).
The second amendment is to MEC's bridge loan with MID Islandi, sf., which amends the bridge loan agreement made as of July 22, 2005, as supplemented and amended by a bridge loan consent and waiver agreement made as of October 14, 2005, and as amended by a first amending agreement made as of February 1, 2006 (the "MID Bridge Loan"). The MID Bridge Loan maturity date has been extended from August 31, 2006 to December 5, 2006. Also, MID Islandi, sf. provided its consent to MEC's amended share purchase agreement and ownership transfer of The Meadows and MEC exercising its option to acquire the remaining 70% of AmTote International, Inc. In connection with the amendments, MEC will pay the Lender an extension fee of $500,000 (0.5% of the amount of the MID Bridge Loan), plus an additional fee of $500,000 if MEC does not complete its sale of The Meadows by November 6, 2006.
Consideration of the amendment to the MID Bridge Loan by MEC was supervised by the Special Committee of MEC's board of directors consisting of Jerry D. Campbell (Chairman), Louis E. Lataif, William J. Menear and Gino Roncelli. The approval of MEC's board followed a favourable recommendation of the Special Committee.
This press release contains "forward-looking statements" within the meaning of applicable securities legislation, including the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements may include, among others, statements regarding: our strategies and plans; expectations as to financing and liquidity requirements and arrangements; expectations as to operational improvements; expectations as to cost savings, revenue growth and earnings; the time by which certain redevelopment projects, transactions or other objectives will be achieved; estimates of costs relating to environmental remediation and restoration; proposed new racetracks or other developments, products and services; expectations as to the timing and receipt of government approvals and regulatory changes in gaming and other racing laws and regulations; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, operating results, prospects or liquidity; projections, predictions, expectations, estimates, beliefs or forecasts as to our financial and operating results and future economic performance; and other matters that are not historical facts.
Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or the times at or by which such performance or results will be achieved. Undue reliance should not be placed on such statements. Forward-looking statements are based on information available at the time and/or management's good faith assumptions and analyses made in the light of our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the Company's control, that could cause actual events or results to differ materially from such forward-looking statements. Material factors that could cause actual results to differ materially from our forward-looking statements include, without limitation, adverse changes in general economic conditions, a decrease in the popularity of racing and other gaming activities as recreational activities, changes in the regulatory environment affecting the racing and gaming industries, and an inability to finance, execute or implement our strategies and plans within expected timelines or budgets. The material factors or assumptions that were applied in drawing conclusions set out in our forward looking statements include, without limitation, the assumptions that there will not be an adverse change in general economic conditions, a decrease in the popularity of racing and other gaming activities, or any material changes in the regulatory environment, and that we will be able to finance, execute and implement our strategies and plans as anticipated.
Forward-looking statements speak only as of the date the statements were made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.
MEC, North America's number one owner and operator of horse racetracks, based on revenues, acquires, develops and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. Additionally, MEC owns and operates XpressBet®, a national Internet and telephone account wagering systems, and Horse Racing TV™, a 24-hour horse racing television network.
For more information contact:
Blake Tohana
Executive Vice-President and Chief Financial Officer
Magna Entertainment Corp.
337 Magna Drive, Aurora, ON L4G 7K1
Telephone: 905-726-7493
www.magnaent.com
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PRESS RELEASE MAGNA ENTERTAINMENT CORP. ANNOUNCES THAT IT HAS AMENDED AND EXTENDED TWO FINANCING AGREEMENTS
