Six Flags files for chapter 11 Bankruptcy - update

(RTTNews) - Theme park company Six Flags, Inc. ( SIXF.OB | Quote | Chart | News | PowerRating) said in a Form 8-K filing with the Securities and Exchange Commission, or SEC, on June 13 that it had filed a voluntary petition for relief under chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of Delaware. The filing marks the final step in the company's ongoing efforts to restructure its debt obligations and position the company for long-term success.

On June 13, the New York City-headquartered company said that it and certain of its subsidiaries have begun reorganization proceedings under the Chapter 11 Bankruptcy Code. The company then said that the plan would result in a deleveraging of its balance sheet by approximately $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations.

The companies included in the bankruptcy filing were Six Flags, Inc., Six Flags Operations Inc., or SFO, and Six Flags Theme Parks Inc., or SFTP, and certain of SFTP's domestic subsidiaries.

According to Mark Shapiro, President and Chief Executive Officer of Six Flags, the current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in the challenging financial markets.

"No one should be confused about what a bankruptcy process means for Six Flags. Following a record year of performance in 2008, which completed the three-year turnaround of our system-wide park operation, this action to clean up the balance sheet paves the way for a full revival of the company. We will emerge from this process stronger and more competitive than ever," Shapiro noted.

He has also emphasized that the Chapter 11 filing will have no impact on the company's day-to-day park operations.

According to the company, in anticipation of the bankruptcy filing, the debtors entered into a Plan Support Agreement, dated June 13, 2009, with certain participating lenders, who are parties to the Second Amended and Restated Credit Agreement, dated as of May 25, 2007. The debtors' proposed financial restructuring, as outlined in the Support Agreement, has the unanimous support of the lenders' steering committee and the Administrative Agent, the company noted.

Six Flags also said that pursuant to the Support Agreement, the participating lenders have agreed to support the debtors' proposed financial restructuring. They have also agreed not to transfer the claims of the Lenders, subject to certain exceptions.

Further, the debtors continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

The company said it had terminated the exchange offers for the SFI Notes and the related solicitation of consents to the indentures pursuant to which the SFI Notes were issued because certain conditions to the exchange offers were not satisfied. The company also noted that no further tenders of SFI Notes will be accepted and any SFI Notes previously tendered pursuant to exchange offers and not withdrawn will be promptly returned to the tendering holder.

As a result of the Bankruptcy Filing, the company stated that it will not make the semi-annual interest payment on the Convertible Notes or the 2014 Notes, due on May 15 and June 1, respectively. The company previously announced that it had chosen to take advantage of the applicable 30-day grace periods under the Convertible Note Indenture and the 2014 Indenture for making such semi-annual interest payments.

SIXF.OB is trading at $0.1670, down $0.0970, on a volume of 11.09 million shares.

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