- The Washington Times - Monday, March 16, 2009

NEW YORK (AP) - A key holder of Six Flags Inc.’s debt is holding up negotiations to restructure the debt, the company’s president and chief executive told investors Monday.

CEO Mark Shapiro did not name the debt holder, which he said holds a “significant amount” of the company’s senior notes due in 2010. But he said it “has refused to meet” to renegotiate the debt.

“The auto companies have an easier time getting a meeting with the United Auto Workers than I do of getting a meeting with this particular portfolio fund manager,” Shapiro said.

The New York-based company said in its annual report last week that a Chapter 11 filing is possible if it doesn’t restructure its debt.

The company’s first looming obligation is to holders of its preferred income redeemable shares, or PIERS, which will be due more than $300 million when the shares mature on Aug. 15.

Six Flags has said it does not expect to have enough cash to meet that obligation.

“We simply can’t refinance our debt with the markets being what they are and we can’t sell excess real estate in this environment and expect to get something even close to full value,” Shapiro said.

Shapiro disclosed that the company has retained investment banking firm Houlihan Lokey financial advisers to help restructure the company’s balance sheet to reduce debt and expects any out-of-court solution to include a “significant debt-for-equity exchange.”

Shapiro said restructuring debt _ in court or outside _ will not affect the experience visitors have at its theme parks and the company plans a “heavy advertising and communications blitz” to get that message to the public.

Despite its debt burden, Shapiro said, Six Flags has achieved its operational objectives of making its parks more attractive to families, growing its sponsorship and licensing businesses, improving profit margins and generating positive free cash flow last year for the first time in the company’s history.

Six Flags reported last week that its revenue fourth-quarter rose as attendance at its parks jumped 9 percent over the same period the year before. The company’s losses, however, widened to $206.6 million, or $2.12 per share, in part because the company’s income tax expense spiked.

Even with consumers cutting their spending and labor and other operational expenses forecast to rise this year, Shapiro said he remains optimistic about the parks’ performance this summer.

Six Flags shares, which have traded under $1 since September, were trading as low as their all-time low of 14 cents on Monday. The stock has traded between 14 cents and $2.50 during the past 52 weeks.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide