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Junior Bondholders Taking Over Six Flags


Saturday, March 20th, 2010

Six Flags will be taken over by junior bondholders in a settlement deal which was reached after two weeks of bankruptcy proceedings.

The theme-part company came to the settlement on Friday, although it still has to be approved by U.S. Bankruptcy Judge Christopher Sontchi.
 
Two groups of bondholders were battling over who would be paid what when the trial was stopped so the two competing sides could negotiate.

How it will work is the junior bondholders will acquire up to $725 million in new stock Six Flags will issue, which will partially be used to pay off senior bondholders approximately $420 million they are owed, along with company lenders, who are still owed close to $1.1 billion. New loans will be secured to make up the difference as well.

The original goal of Six Flags when seeking bankruptcy protection was to lower their debt by $1.8 billion. Once the company exits bankruptcy, they are projected to hold about $1.1 billion in debt at that time.

Six Flags filed for bankruptcy protection in June 2009.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: bankruptcy , junior bondholders , six flags