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Times haven't been good for amusement parks. The parent of Hard Rock Park in Myrtle Beach, S.C., HRP Myrtle Beach Holdings, filed for bankruptcy on Sept. 24, while Ghost Town Partners, which operates the Ghost Town in the Sky amusement park in Maggie Valley, N.C., submitted a Chapter 11 petition on Wednesday. Six Flags, too, was busy Wednesday, filing its annual report with the Securities and Exchange Commission and noting in it that its Preferred Income Equity Redeemable Shares, or Piers, are required to be redeemed in August for $287.5 million in cash. "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 of the PIERS prior to their mandatory redemption date on Aug. 15, 2009," the annual report said. If the amusement park operator cannot refinance or restructure the Piers, it would be in default, which would cause a cross-default with its other long-term debt. "Accordingly, we have stated in our financial statements ... that there is substantial doubt about our ability to continue as a going-concern unless a successful reorganization occurs," the SEC documents said. Six Flags, which operates parks in New Jersey, Virginia and Massachusetts, among other states, has reportedly hired Paul Hastings Janofsky & Walker to prepare a possible bankruptcy filing. Its also hired investment bank Houlihan Lokey Howard & Zukin to help it negotiate with its creditors, The Wall Street Journal said. However, Six Flags is trying to restructure itself out of court in order to avoid Chapter 11, the Journal reported. The Deal has had its eye on Six Flags since June 17, when it was the subject of a bankruptcy warning because of a missed interest payment. At that time, Moody's Investors Service downgraded its ratings on the company's notes due in 2010 to Caa3 from Caa, according to the Deal Pipeline. In its
recent annual report, the company reported a $112.96 million net loss
for 2008. Its loss in the fourth quarter alone increased to $201
million from $127 million in the same 2007 period, The Washington Post reported. Now
the question is: Will Six Flags sink to the depths of bankruptcy before
having to make its debt payment at the height of the summer
season? - Jamie Mason
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Could Six Flags Inc.'s (NYSE:SIX) next
ride take it to Chapter 11? If it can't restructure its debt by August,
it may be facing a bankruptcy filing, the company said in its latest
annual report.
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