Six Flags amended plan includes $725 million in equity commitments

By Caroline Salls

Pittsburgh, April 8 - Six Flags Inc.'s amended plan of reorganization includes $725 million in equity commitments to be backstopped by some noteholders, according to a summary filed with the Securities and Exchange Commission.

As previously reported, the company filed an amended plan last week with the U.S. Bankruptcy Court for the District of Delaware.

According to the SEC filing, funding for the new plan will come from $655.5 million in cash currently held in escrow, a $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.

Under the amended plan, 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 the 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 company's exit facility will consist of a $120 million revolving five-year credit facility, a $770 million six-year first-lien term loan and a $250 million 61/2-year second-lien debt facility.

Interest on the revolver will be Libor plus 425 basis points, interest on the first-lien term loan will be Libor plus 400 bps, and interest on the second-lien loan will be Libor plus 800 bps.

Creditor treatment

Creditor treatment under the amended plan will include:

• Holders of pre-bankruptcy credit agreement claims against Six Flags Theme Parks Inc. will be paid in full in cash from the proceeds of the first-lien and second-lien term loans and $700 million of the equity commitment;

• Holders of unsecured claims against Six Flags Operations will be paid in full in cash;

• Holders of other secured claims will be paid in full or have their claims reinstated;

• Holders of unsecured claims against debtors other than Six Flags Inc. and Six Flags Operations will be paid in full or have their claims reinstated;

• Holders of unsecured claims against Six Flags Inc. will receive 9.5% of new common stock, as well as Six Flags Inc. participation rights;

• Pre-confirmation Six Flags Theme Parks and Six Flags Operations equity interests will be reinstated;

• Holders of pre-confirmation Six Flags Inc. equity interests will receive no distribution; and

• Pre-confirmation subsidiary equity interests will remain unaltered.

Six Flags, a regional theme park company based in New York, filed for bankruptcy on June 13, 2009 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-12019.

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