NEW YORK (AP) - Six Flags has announced a debt restructuring plan, including a stock-for-debt exchange offer, intended to help the theme park operator avoid filing for Chapter 11 bankruptcy protection.
In a Securities and Exchange Commission filing late Friday, Six Flags announced an offer to trade new common shares for three series of senior notes. Six Flags also said it is asking holders of its outstanding notes to remove or change terms of its debt, including the conditions that mean it is in default.
If the exchange is successful, the company’s outstanding Preferred Income Equity Redeemable Shares, or PIERS, will be converted to stock as well. The company is supposed to redeem the PIERS by Aug. 15 but has said it does not expect to have enough cash _ more than $300 million.
Failing to meet that obligation would count as a default under Six Flags’ credit facility and allow the company’s lenders to demand faster payment schedules.
The offer and consent solicitation expire on June 25.
If the plan fails, Six Flags said it will explore other restructuring alternatives, which may include filing for bankruptcy court protection.
Last week, Six Flags said the New York Stock Exchange will suspend the company’s common stock and PIERS from trading before the market opens Monday. The New York-based company said it does not plan to appeal the decision.
Six Flags shares have traded below $1 since September. They closed at 13 cents on Friday.
Six Flags expects its stock and PIERS to trade on the over-the-counter market after the delisting and be quoted on the OTC Bulletin Board.
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