Six Flags Inc, the owner of 20 theme parks, has sought bankruptcy protection three-and-a-half years after Washington Redskins owner Daniel Snyder became chairman and hired new managers in an attempt to return it to profitability.
The Chapter 11 petition filed in US Bankruptcy Court in Wilmington, Delaware, listed assets of US$3 billion and debt of US$2.4 billion as of Dec. 31. Thirty-six affiliates also sought protection.
SHAKEUP FALLOUT
Snyder began a shakeup of Six Flags in late 2005 after winning three seats on the board. The 48-year-old company hasn’t posted an annual profit since 1998 and had losses of US$558.8 million in the two years after Snyder became chairman.
Six Flags shares have fallen 86 percent in the past 12 months as investors have grown skeptical about the company’s ability to refinance preferred income equity redeemable shares, or PIERS, before their August redemption date.
On Aug. 15, US$287.5 million in preferred stock matures and US$131 million of 8.875 percent senior notes come due next year.
DEBT REDUCTION
The company said in a statement on Saturday it was seeking court approval of a prearranged reorganization plan that will cut its debt by about US$1.8 billion and eliminate more than US$300 million worth of preferred stock obligations. The reorganization plan has yet to be filed with the court.
The 20 largest creditors without collateral backing their claims are owed about US$1.3 billion, court papers show.
HSBC Bank USA, National Association as Trustee for holders of the company’s 12.25 percent notes due 2016, is listed as the largest unsecured creditor. The principal amount due under the bonds is US$400 million.
Any debt-for-equity exchange offers by the company have ended due to the bankruptcy filing, Six Flags said in the statement.
Six Flags, which has theme parks in the US, Canada and Mexico, had US$79.4 million in cash and US$2.31 billion in long-term debt as of March 31, its first-quarter financial statement shows.
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