22 Mar 2009

New York / USA: Is Six Flags being threatened with insolvency?


Dramatic worsening of the future of the Six Flags group: the reason is the payment of $300 million to the owners of Six Flags preference shares, which Six Flags doesn’t have the money for. For months there have been internal discussions about restructuring, in order to save significant costs in this way. In the fourth quarter of 2008, the company which was founded in 1961 made a loss of $206 million. According to the “New York Times” from 14th March, Six Flags hired both the investment bank Houlihan Lokey as a consultant for the restructuring and the renowned law firm Paul Hastings for the preparation of a possibly necessary insolvency claim according to chapter 11. In September 2008 the Six Flags shares went below the magic line of a dollar (and therefore became penny stock!) and in the last few days once again significantly decreased in value – the closing price at NYSE on 13th March was a measly $0.16 after a day’s loss of around 16 percent. Recently Six Flags had extended their activities in the course of the global “rat race” beyond the USA to Dubai and Qatar. How in the case of insolvency the activities there could continue, remains to be seen; especially as the investors there are under significant pressure themselves due to the worldwide financial crisis. The “New York Times” asks cynically in their mentioned article: would parents let their children ride a roller coaster in an insolvent leisure park…?! – Six Flags owns 20 parks through its subsidiary companies in the USA, Mexico and Canada. (eap)