Six Flags requests emergency court approval of equity commitments

By Caroline Salls

Pittsburgh, April 16 - Six Flags Inc. is seeking emergency court approval of an amended common stock equity commitment, a Six Flags Operations noteholders commitment letter and a delayed-draw equity commitment, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Six Flags filed an amended plan of reorganization on April 1 under which backstop purchasers will buy $100 million of new common stock at a discount price of $75 million, and Pentwater Capital Management LP will purchase $25 million of the new common stock at the rights offering price under a delayed-draw equity purchase.

In addition, Stark Investments, Altai Capital Management, H Partners Management LLC, Bay Harbour Management LC and Pentwater will buy an additional $50 million of equity.

The amount of the company's rights offering has also been increased to $505.5 million from $450 million.

In a summary filed with the Securities and Exchange Commission, the company said funding for the new plan will come from $655.5 million in cash currently held in escrow, the $505.5 million rights offering, binding agreements to convert $19.5 million to $69.5 million of Six Flags Operations notes claims into new common stock, depending on whether the court orders post-bankruptcy interest be paid on those claims, and $25 million in delayed-draw funding callable until June 2011.

According to Thursday's equity commitment motion, Six Flags will pay a break-up fee equal to 2.5% of the amount of the equity commitment to the backstop purchasers if it enters into an alternate equity financing transaction or does not issue the new Six Flags common stock.

Also, if the company enters into an equity financing transaction with parties other than the Six Flags Operations parties and the backstop purchasers, it will pay a break-up fee of 2.5% of the Six Flags Operations parties' commitment.

The Six Flags noteholder providing the commitment under the delayed-draw equity commitment will also receive a commitment fee of 0.526% of the new Six Flags common stock.

The company has requested an April 28 hearing.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13, 2009. Its Chapter 11 case number is 09-12019.

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