Six Flags’ filing won’t affect park

PHOTOGRAPHER: Jason Subik

New York City-based Six Flags Inc., owner of the Great Escape in Queensbury, announced Saturday it is seeking Chapter 11 bankruptcy protection, saying it needs to reorganize and shed $1.8 billion in debt.

Six Flags Great Escape Properties Public Relations Manager Becky Valenti said employment levels will not be affected locally and the parks will remain open all summer.

“This will not affect Great Escape at all. We opened May 9 and we’re in the middle of our longest season ever. We added Sasquatch this year, we’re bringing the all new holiday-in-the-park. This will not affect what the guests see or the guests experience at the park,” she said. “This park has been around for 50 years and we’re going to be around for 50 more.”

Six Flags says it actually had a great year in 2008. It saw 25 million visitors and posted record revenues. But executives are trying to lighten a $2.4 billion debt load that they say is unsustainable.

Saturday’s bankruptcy filing came after an earlier plan failed to negotiate an out-of-court deal with creditors.

Six Flags officials Saturday released a letter from company President and CEO Mark Shapiro to employees. Shapiro said there would be no workforce or benefits reduction as a result of the Chapter 11 filing and all of the company’s 20 amusement parks will remain open this summer and “for years to come.”

“To put it into context, even if you have a record year and make approximately $275 million, as we did last year, when you have to pay out approximately $175 million in interest expense on your debt and $100 million in park improvements to maintain and keep up with the business, that’s a balancing act you just can’t risk year in and year out,” Shapiro wrote.

Since Shapiro became president in 2005, his turnaround plan has helped boost Six Flags revenues by selling many of the company’s smaller, regional theme parks and by focusing on the company’s stronger parks.

While a smaller park in the scope of the Six Flags business, the Great Escape has a long local history. It began as amusement park magnate Charley Wood’s Storytown USA when it opened in 1954 on Route 9 between Glens Falls and Lake George, featuring a nursery rhyme motif. Storytown became The Great Escape in 1982. Wood sold to Premier Parks in 1996, and Premier later purchased amusement park giant Six Flags and retained the name.

Valenti said the Great Escape is a profitable park for Six Flags and has received no indication the company might sell it.

In his letter, Shapiro wrote that one of the key reasons for Six Flags’ bankruptcy filing is over $400 million of debt coming due over the next year. He said Six Flags can’t refinance the debt in “these financial markets.”

“That’s our situation in a nutshell.”

In its fourth-quarter earnings report in March, Six Flags warned of the possibility of bankruptcy. The company said it did not expect to have enough cash to cover more than $300 million coming due Aug. 15.

Shapiro said the bankruptcy reorganization plan has the unanimous support of the company’s $1.1 billion senior secured credit facility. He said the support is evidenced by executed lock-up agreements.

“We expect to proceed quickly and we intend to emerge from these proceedings in the coming months with a significantly improved balance sheet and greater operational and financial flexibility,” he said.

Six Flags shares have traded below $1 since September. They closed at 26 cents on Friday.