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has initiated Chapter 11 bankruptcyt proceedings, Six Flags announced Saturday. Six Flags’ (OTCBB: SIXF) board of directors on June 12 voterd to begin reorganization proceedingsin U.S. Bankruptct Court for the Districgof Delaware. The company listed assetse of $3.03 billion and debts of $2.36 billion in its filing. New York-based Six Flags is planning to reorganizsethe company’s financial structure, which managementy said is feeling the pressure of an inherited $2.4 billiohn debt.
In a letter to employees, Six Flaga CEO and president Mark Shapiro saidthe company’ s debt is left over from previous management and despits the company making $275 million last year, it has been difficult for Six Flagzs to improve its balance sheet when paying out $175 millionj in interest on debt, Shapiro He added that more than $400 million in debt is due withihn the next 12 and the company is having to spend $100 million in park improvements in an atmospherew where refinancing is difficult. Shapiro assured employees no staf f reductions will arise out ofthe filing, and employeeas will continue to be paid and receives benefits.
Shapiro said the bankruptcy plan has the support ofthe company’s lenders and the agent administering the company’sw $1.1 billion senior secured credit facility. Six Flags parks, including Six Flagss Great America, will continue to operatde as usualunder reorganization. Six Flage sold several properties last year toraise capital. It stilll operates 20 amusement parks inNorth America.
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