Magna International Inc. - OMEGA

in March 2002, MEC entered into an agreement to acquire the operations and related assets of Lone Star Park at Grand Prairie, a
thoroughbred and quarter horse racetrack near Dallas, Texas. Subject to customary adjustments, the purchase price for Lone Star
Park will include a cash purchase price of $80 million plus the assumption of certain liabilities, including a $19 million capital lease
obligation. The Lone Star transaction is expected to be completed in the second quarter of calendar 2002.
Financing and Securities Transactions
In June 2001, Decoma completed the public offering of 16.1 million Class A Subordinate Voting Shares at a price per share of
Cdn.$10.85 for gross proceeds of approximately Cdn.$175 million. This transaction improved the liquidity of Decoma’s Class A
Subordinate Voting Shares by increasing the number of such shares not held by us from approximately 4.6 million to 20.7 million.
The proceeds of Decoma’s June 2001 public offering were used to reduce Decoma’s debt.
In August 2001, we completed the spin-off of Intier by way of an initial public offering of approximately 5.5 million Class A
Subordinate Voting Shares at a price per share of Cdn.$21.00 and U.S.$13.72, for gross proceeds of Cdn.$115,000,000. See “ -
Creation of Global Automotive Systems Groups” above.
On September 18, 2001, we redeemed all of our outstanding 5% Convertible Subordinated Debentures due 2002. An aggregate
of $345 million principal amount of these convertible debentures were issued in October 1995, of which an aggregate $223,667,000
principal amount of these debentures were converted into 4,216,682 of our Class A Subordinate Voting Shares prior to the
redemption date. We redeemed the remaining $121,333,000 on September 18, 2001 by paying the holders of these outstanding
debentures the principal amount plus accrued and unpaid interest to the redemption date.
On April 10, 2002, MEC completed the public offering of 23 million shares of its Class A Subordinate Voting Stock at a price
per shares of $6.65 in the United States, or Cdn.$10.60 in Canada, for gross proceeds of approximately $153 million. The proceeds
of this offering are to be used by MEC for general corporate purposes, including repayment of borrowings, working capital, capital
expenditures and the potential acquisition or construction and development of additional racetracks and related entertainment
operations, training centres, off-track betting facilities and account wagering operations.
In April 2002, we extended until April 2003 a revolving credit facility with a syndicate of Canadian, U.S. and European banks.
We also reduced the facility from Cdn.$900 million to Cdn.$500 million. This credit facility is unsecured, except for certain internal
cross-guarantees. The reduction in this credit facility was related in part to the spin-off of Intier and corresponded with the
establishment by Intier in September 2001 of a $385 million three-year unsecured credit facility with a syndicate of nine lenders.
On May 2, 2002, we announced our intention to redeem on June 6, 2002 all of our outstanding 4.875% Convertible
Subordinated Debentures due 2005. The redemption price, inclusive of accrued and unpaid interest is $1,015.0313 per $1,000
principal amount of debentures, such amount to be paid by the issuance of 13.6477 of our Class A Subordinate Voting Shares per
$1,000 principal amount of debentures. Approximately $480 million principal amount of these debentures remain outstanding.
ITEM 3. DESCRIPTION OF THE BUSINESS
Our operations are segmented into our Automotive Operations segment, which is further subdivided into publicly traded and
wholly-owned automotive systems groups as well as corporate and other operations; and our Non-Automotive Operations
segment, conducted through MEC.
AUTOMOTIVE OPERATIONS
Our automotive operations are conducted through manufacturing, engineering and product development facilities which are
organized as autonomous operating divisions under one of five automotive systems groups. Three of our automotive systems
groups are publicly traded companies in which we retain a significant equity interest and two of our automotive systems groups
are currently wholly-owned. The organization of our automotive systems groups was completed in 2001, as described under
“ITEM 2. GENERAL DEVELOPMENT OF THE BUSINESS - RECENT DEVELOPMENTS IN OUR BUSINESS - Creation of
Automotive Systems Groups”. Our automotive operations also include substantially all of our wholly-owned automotive real
estate.
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