Six Flags Shareholders Could See Shares Wiped Out By Bankruptcy
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Snyder Owns About 6%
Of Six Flags Shares |
Redskins Owner Daniel Snyder and "other Six Flags shareholders, including Bill Gates's Cascade Investment, are likely to see their shares wiped out as a result of the theme park chain filing for Chapter 11 bankruptcy protection over the weekend," according to a source cited by Thomas Heath of the WASHINGTON POST. Snyder, who has served as Six Flags Chair since "winning a proxy fight with Gates's support in 2005," owns about 6% of the shares, and those shares are "likely to be worthless as the company pays off more senior creditors in anticipation of issuing new shares." Six Flags is "reeling under the interest payments" on $2.4B in debt, and the company is "attempting to reduce that total by about $1.8[B] and eliminate more than $300[M] in preferred stock payments due in August." In filings yesterday with the SEC, Six Flags said that $600M of existing bank debt "will remain as a debt obligation after the bankruptcy concludes, with the rest of the bank debt converted into new common stock." The filings indicated that Snyder will remain as Six Flags Chair and Virginia-based NVR Chair Dwight Schar "also intends to stay" as a member of the BOD. Six Flags CEO Mark Shapiro said that "all 20 Six Flags parks throughout North America will remain open and do business as usual." But Heath writes the current economic climate, "with unemployment above 9[%], may make it difficult for Six Flags to increase revenues" (WASHINGTON POST, 6/16). Shapiro said the "brand is very strong and the business is healthy,” but the bankruptcy filing is “about the past." Shapiro: “We inherited over $2.5(B) in debt, and I don't care what kind of economy you're in or what marketplace, you simply can't sustain those kinds of levels." Shapiro said the company is taking $2.1B "off the balance sheet, and anytime you do something like, you can expect bondholders and common stockholders (are) going to get heavily diluted” ("Money for Breakfast," Fox Business, 6/16).
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