NEW YORK — Shares of Six Flags Inc. fell Friday on growing speculation that the theme park operator may be forced to file for Chapter 11 bankruptcy protection after the company said it could not meet a looming financing obligation.

Six Flags shares, which have traded under $1 since last September, lost 3 cents, or 16.8 percent, to 16 cents in morning trading. The stock has traded between 16 cents and $2.50 during the past 52 weeks.

In its annual report on Wednesday, the company said a Chapter 11 filing is possible if the New York-based company cannot reach a deal to restructure its debt.

In Atlanta, the popular theme park lowered prices and opened early this season, in part to generate revenue as the company struggles.

In its fourth-quarter earnings report on Tuesday, Six Flags said it does not expect to have enough cash to redeem its preferred income redeemable shares, or PIERS, when they mature on Aug. 15. The shares, known as PIERS, must be redeemed for $287.5 million plus accrued and unpaid dividends, which may total up to $31.3 million.

If the company defaults on its PIERS maturity, it would constitute a default that would allow its lenders to demand payment on other financial obligations.

Six Flags said a Chapter 11 filing could occur “well in advance” of the PIERS’s maturity in August, if the company decides an out-of-court agreement is not possible or to its advantage.

The upcoming PIERS obligation has been an ongoing concern for Six Flags investors. The company has skipped making its PIERS dividend payments since last May, noting that unpaid dividends accrue without interest.

Last September, Moody’s Investors Services downgraded Six Flags’ corporate family and probability of default ratings to a “Caa2” junk grade, saying it did not expect the company to have enough free cash flow or credit capacity to redeem the shares.

Moody’s also expressed concern about Six Flags’ $131 million senior unsecured notes, which mature in February 2010.

A Six Flags representative was not immediately available for comment on Friday. The company has scheduled a conference call with its investors before the market opens on Monday to discuss its fourth-quarter results.

On Tuesday, the company reported that its losses widened in the fourth quarter to $206.6 million, or $2.12 per share, as the company’s income tax expense spiked.

The company’s revenue gained, however, as quarterly attendance at its parks jumped 9 percent, driven by an increased mix of season pass attendance.

In a statement with its results, Chief Executive Mark Shapiro said Six Flags’ three-year turnaround plan is paying off.

“The remaining challenge is the inherited balance sheet and we are in comprehensive dialogue with our lenders to remedy that issue,” he said.

Source: Bankruptcy possibility looms for Six Flags | ajc.com

New York — The president and chief executive of Six Flags says one key debtholder is holding up negotiations for an out-of-court refinancing deal.

CEO Mark Shapiro did not name the debtholder but said it was a portfolio fund manager. He was speaking to investors on a quarterly conference call Monday.

The situation is increasing the theme park operator’s difficulty is avoiding a Chapter 11 bankruptcy filing.

Shapiro is stressing that the company’s restructuring — whether in or out of court — will not affect the experience visitors have at its theme parks.

Six Flags operates three parks in metro Atlanta: Six Flags Over Georgia in Austell, and Six Flags White Water and American Adventures in Marietta.

Source: Six Flags CEO says debtholder refuses to talk | ajc.com

New York —- A key holder of Six Flags Inc.’s debt is holding up negotiations to restructure the debt, the company’s president and chief executive told investors Monday.

CEO Mark Shapiro did not name the debt holder, which he said holds a “significant amount” of the company’s senior notes due in 2010. But he said it “has refused to meet” to renegotiate the debt.

“The auto companies have an easier time getting a meeting with the United Auto Workers than I do of getting a meeting with this particular portfolio fund manager,” Shapiro said.

Six Flags over Georgia is located in Austell.

The New York-based company said in its annual report last week that a Chapter 11 filing is possible if it doesn’t restructure its debt.

The company’s first looming obligation is to holders of its preferred income redeemable shares, or PIERS, which will be due more than $300 million when the shares mature on Aug. 15.

Six Flags has said it does not expect to have enough cash to meet that obligation.

“We simply can’t refinance our debt with the markets being what they are and we can’t sell excess real estate in this environment and expect to get something even close to full value,” Shapiro said.

Shapiro disclosed that the company has retained investment banking firm Houlihan Lokey financial advisers to help restructure the company’s balance sheet to reduce debt and expects any out-of-court solution to include a “significant debt-for-equity exchange.”

Shapiro said restructuring debt —- in court or outside —- will not affect the experience visitors have at its theme parks and the company plans a “heavy advertising and communications blitz” to get that message to the public.

Despite its debt burden, Shapiro said, Six Flags has achieved its operational objectives of making its parks more attractive to families, growing its sponsorship and licensing businesses, improving profit margins and generating positive free cash flow last year for the first time in the company’s history.

Six Flags reported last week that its fourth-quarter revenue rose as attendance at its parks jumped 9 percent over the same period the year before.

The company’s losses, however, widened to $206.6 million, or $2.12 per share, in part because the company’s income tax expense spiked.

Even with consumers cutting their spending and labor and other operational expenses forecast to rise this year, Shapiro said he remains optimistic about the parks’ performance this summer.

Source: Six Flags' talks on debt hit snag | ajc.com

this is bad news for the theme park industry although I have never been to a SF park I hope it makes it through this bad patch!

Growing up in Southern California, I went to Six Flags' Magic Mountain on many occasions. They have their niche' ... the thrill-seekers. But, they are very nice parks and I hope that they can weather this economic storm we are in the midst of here in the States.

I was reading on another site that folks thought Disney should buy them and turn them into "Mini-Disney" parks and have a presence in many other states here in the U.S.

Personally, I don't think it's a good idea and I just hope that Six Flags can meet the numbers necessary and make the adjustments needed to stay ahead of where we are.

Wow this is the first I'm hearing about Six Flags having troubles but I do have to say that I am not surprised. With the economy the way it is everyone is suffering. If families don't have their own money for expensive park tickets or even gasoline to drive to Six Flags I can see why they would be hurting. I grew up with a Six Flags not to far away and used to go every summer. It was a very fun place but their food was outrageously overpriced. Hopefully they can have some better times this year.

We should pool our money and buy it. I have $10 in Amazon gift cards from the trivia contest, WHO'S WITH ME?

Yeah that's right, It's my first time also that I heard about six flags committing in trouble but take note it talks about bankruptcy. But will talking about bankruptcy no one is excused we are now experiencing that our economy turns into facing poverty, most of us are suffering. All I can suggest for them is that better to find a bankruptcy attorneys for them to overcome and solved whatever problems that they are facing right now.

they always get bankrup thie 2wice sice they bank: Bankruptcy last year mabey its time for disney to bye the that theaame park and make a third park

Everyone of us now are suffering in terms of money.Most especially in our community now. I head they will be facing about six flag having troubles talking about bankruptcy.The options for refinancing the debt are limited and complicated,though the company may be the best served seeking a bankruptcy attorney i know they have a lot of solution that not harm existing debt-holders..I am assure you we can overcome what are problem facing nowadays.