TORONTO (Reuters) - MI Developments Inc MIMa.TO said on Friday its chief executive, John Simonetti, long frustrated by infighting among shareholders over the restructuring of the company, will leave MID after an unspecified transition period.
“I do believe that there’s something out there that will be able to achieve a consensus (on restructuring),” Simonetti told a conference call after the land development company released its second-quarter earnings.
“I’ve tried for the last three years, and maybe what we need to do is take a step back and maybe a new face has to go talk to the shareholders to try and get something done.”
Frank Stronach, MID chairman and founder of auto parts maker Magna International MGa.TO, put forward his latest restructuring plan for the company at the end of March.
The plan would see MID sell its controlling stake in race track owner and operator Magna Entertainment MECa.TO to a group controlled by Stronach, for $25 million.
Under the proposal, MID shareholders would be compensated through a restructuring under which they would exchange their current shares for $15.50 cash and new shares of MID.
While MID shareholders have long advocated selling the company’s 54 percent (as of June 30) stake in money-losing Magna Entertainment, some have said the deal would result in an “outrageous payoff” to Stronach.
Magna Entertainment reported a slightly smaller second-quarter loss earlier this week, but said it was behind on its debt elimination plan as the U.S. real estate downturn has hampered its ability to sell some of its assets.
Simonetti has been at MID since it was spun off from Magna International in 2003. He will return to a position at Magna International when leaves MID.
MID said its quarterly profit more than tripled on the back of higher rental revenues.
The company said its consolidated second-quarter profit rose to $28 million, or 60 cents a share, for the period ended June 30. That’s up from $7.6 million, or 16 cents a share, in the same period last year.
MID reported funds from operations of $39 million, or 83 cents a share, for the quarter, up from $31.3 million, or 64 cents a share, in the year-before quarter.
Consolidated revenue during the quarter rose to $214 million from $209 million.
The company’s shares closed down 18 Canadian cents, or 0.9 percent, at C$20.64 on the Toronto Stock Exchange.
Additional reporting by Jennifer Kwan; editing by Rob Wilson