Six Flags won't sell parks, cut workers
Following Chapter 11 bankruptcy filing this weekendNEW YORK -- Six Flags Inc will not sell assets or reduce its workforce as a result of its Chapter 11 bankruptcy filing this weekend, the theme park operator's chief executive told CNBC on Monday.
"This isn't a liquidation," said CEO Mark Shapiro. "This is about the past. This is about debt that's been around for just too long."
Six Flags, which operates or owns 20 parks in North America, filed for Chapter 11 bankruptcy protection in the early hours of Saturday morning. The company was saddled with a $2.4 billion debt load and faced a looming cash $300 million payment to preferred stock holders in August.
The company tried to convince lenders to swap debt for equity in the last two months, but abandoned the measure after the measure drew little interest.
Common shareholders, as well as most bondholders, will likely be "heavily diluted" due to the Chapter 11 filing, Shapiro said in the interview.
In its bankruptcy filing, the New York-based company said its restructuring plan will result in the deleveraging of its balance sheet by about $1.8 billion. The plan also calls for the elimination of more than $300 million in preferred stock obligations.
The filing will likely wipe out the 6% stake held by Daniel Snyder, owner of the Washington Redskins football team who took control of the company in a proxy battle in 2005. Other equity stakeholders who will be affected include Bill Gates' fund Cascade Investment LLC, which has about an 11% stake in the company.
Still, Shapiro said Snyder will continue his duties as chairman of the board, a position he took on in December 2005.
The chief executive also said he did not expect the bankruptcy filing to hurt the company's summer revenue because the company has built a reputation for its safety standards.