- The Washington Times - Friday, March 13, 2009

NEW YORK (AP) - Shares of Six Flags Inc. fell in premarket trading Friday as worries grew that the theme park operator may have to file for Chapter 11 bankruptcy protection.

Six Flags shares lost 2 cents, or 10.5 percent, to 17 cents in early trading. The stock has traded between 16 cents and $2.50 during the past 52 weeks.

In its fourth-quarter earnings report on Tuesday, Six Flags said it does not expect to have enough cash to redeem its preferred income redeemable shares on their redemption date of Aug. 15.

The shares, known as PIERS, must be redeemed for $287.5 million plus accrued and unpaid dividends, which may total up to $31.3 million. The company has skipped paying the dividends since May of last year.

The company said the PIERS redemption is one hurdle it is hoping to overcome in pursuing a “comprehensive restructuring of its balance sheet.” If the company fails to refinance or restructure the PIERS, it would constitute a default that would allow its lenders to demand payment for other obligations.

In its annual report filed with the Securities and Exchange Commission on Wednesday, the company said it may be forced to file for Chapter 11 bankruptcy if it cannot negotiate an out-of-court restructuring agreement with its PIERS holders, common stockholder and creditors.

“Such a court filing would likely occur prior to the maturity of the PIERS or well in advance of such date, if we were to conclude at such time that an out-of-court solution is not feasible or advantageous,” Six Flags said in the filing.

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