Frank Stronach is back in the saddle at Magna Entertainment Corp., the horse racetrack and gambling arm of his auto-parts empire.
Magna Entertainment Corp. (MEC) announced Tuesday evening that its chief executive officer, Tom Hodgson, would leave at the end of March, and Stronach would take over until a new one was hired.
"MEC should seek a CEO with in-depth knowledge and experience in the horseracing and gaming industry," the company said in a news release.
MEC stock fell 6.7 per cent or 54 cents to $7.51 in trading on the TSX on Wednesday morning. It has been as high as $9.25 in the past year.
The announcement of Stronach's appointment did not say that he would be a short-term CEO. It emphasized his financial background and Magna Entertainment's need for financial discipline.
The MEC statement credited Hodgson with helping restructure the company after he was appointed CEO on March 8, 2005.
"Tom Hodgson has more than achieved our recapitalization plan goals, and we are grateful for his contributions to the company," Stronach said.
- FROM JULY 22, 2005: Stronach's MI Developments helps racing subsidiary â for a price
Stronach controls MI Developments, which is the controlling shareholder of MEC.
In the restructuring of July 2005, MEC said it planned to sell assets worth $150 million US to reduce debt, as well as do several deals with MI Developments.
Hodgson oversaw the sale of $76 million US worth of assets and deals for sales of another $200 million US are in the works, the company said.
Revenue for 2005 was $624.7 million US, compared with $702.5 million US in 2004. The loss was $105.3 million US (98 cents US a diluted share) , compared with $95.6 million US (89 cents US a diluted share).
MEC's board is looking for a replacement for Hodgson, but he will work as a consultant during the transition and also help close sales already announced, the company said.