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SIX FLAGS REPORTS UNCERTAINTY ON ABILITY TO CONTINUE


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...the owner of a chain of 20 theme parks, said there is substantial doubt about its ability to continue as a “going concern” unless a successful restructuring occurs.

 

The New York-based company has $287.5 million of Preferred Income Equity Redeemable Shares, or PIERS, plus accrued and unpaid dividends, due Aug. 15, it said today in a regulatory filing.

 

“Given the current negative conditions in the economy generally and the credit markets in particular, there is substantial uncertainty that we will be able to effect a refinancing of our debt on or prior to maturity or the PIERS prior to their mandatory redemption date,” Six Flags said in the filing.

 

The company may have to seek a pre-packaged or pre-arranged Chapter 11 filing if it can’t negotiate a restructuring agreement with the PIERS holders out of court, it said. That would likely happen “well in advance of” the PIERS maturity date, Six Flags added.

 

KPMG LLP, the auditors, said there is “substantial doubt” about the company’s ability to continue as a “going concern,” Six Flags said in the filing. ...

 

http://www.bloomberg.com/apps/news?pid=206...O4&refer=us

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If I am reading it right, then Six Flags will have to file bankruptcy if they can't renegociate their loans. Most likely they'll work something out, however, if they file chapter 11 they'll just be extending how long they have to pay back their debts and doing some internal reorganization. Most likely it'll mean that I wouldn't watch for many new projects from six flags until they get their finances turned around. that would be an easy way to pay back debts. If you think about the cost of a roller coaster (22 million for Diamondback) and the fact that they have 20 parks, then if they simply dont build 10 coasters that they normally would over the next few years and used that money to pay off debt, then they would be close to paying off their debt. Of course thats assuming that six flags puts in new coasters every year or two to each park.

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Because of WHAT?

 

...The company said 25.3 million people visited its theme parks in 2008, up from 24.9 million a year ago....

 

http://dallas.bizjournals.com/dallas/stori....html?ana=yfcpc

 

Attendance is up. It's the debt that is the problem. And be aware, Cedar Fair is also deeply in debt, which is why IT is trying to sell three parks.

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it just seems like once the chains get too big then thats when they start having problems.

 

ive never been to a six flags park, and the only ones ive really wanted to go to is SFMM and SFGAdventure. the chain in general has some cool rides but it just seems like they dont take as good of care of their rides as cedar fair does and that concerns me so thats why i havent rushed out to one of their parks..esp the one closest to me which would be the infamous kentucky kingdom.

 

in all though, this is sad that an entire park chain could be going under.

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I used to live near Six Flags Great America. It used to be a great park with pretty good theming, but right around the time I moved away they started ripping out theming and stuffing rides in wherever they could fit them. I've also read that they've added mandatory lockers to all of the rides, which just seems like a pain to me. I can say overall I prefer cedarfair parks, especially since six flags tends to put copies of rides that are popular at multiple parks so its not always worth visiting different park. Regardless, it would be bad if they closed because competition is always good.

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I used to live near Six Flags Great America. It used to be a great park with pretty good theming, but right around the time I moved away they started ripping out theming and stuffing rides in wherever they could fit them. I've also read that they've added mandatory lockers to all of the rides, which just seems like a pain to me. I can say overall I prefer cedarfair parks, especially since six flags tends to put copies of rides that are popular at multiple parks so its not always worth visiting different park. Regardless, it would be bad if they closed because competition is always good.

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