Six Flags, Inc. Noteholders Urge Consideration of Alternative, Fully-Committed Reorganization Plan
Proposed Plan Provides Superior Recoveries for All Constituents; Noteholders Seek Board Engagement on Key Issues
NEW YORK, Nov 29, 2009 (GlobeNewswire via COMTEX) -- An ad hoc group of senior note holders (the "Ad Hoc Committee") of Six Flags, Inc. ("SFI") has submitted to SFI's Board of Directors an alternative reorganization proposal (the "SFI Noteholder Plan") which, if adopted, would provide higher recoveries to the creditors of SFI and its debtor affiliates.
In a letter dated November 25th, the SFI Noteholders urged the Board to accept the SFI Noteholder Plan in favor of the Debtors' Second Amended Joint Plan of Reorganization ("Debtors' Plan"), and to engage in a thoughtful, deliberate restructuring process that will maximize recovery for all creditors, as opposed to the Debtors' Plan, which unfairly provides preferential treatment to holders of a series of 12 1/4% notes issued by Six Flags Operations (the "SFO Notes") to the detriment of the SFI Noteholders. This letter further advocates for an alternative reorganization plan that provides a fully backstopped rights offering of $420 million. This alternative reorganization plan is supported by noteholders owning over $500 million of the approximately $870 million in senior notes issued by SFI. Furthermore, by virtue of this blocking position held by the Ad Hoc Committee, the Debtors are currently wasting valuable estate resources pursuing a plan that is not confirmable.
The SFI Noteholder Plan materially and directly improves upon the Debtors' Plan in that:
* Lenders are paid in full either with cash or through the
reinstatement of their debt.
* SFO Noteholders are paid in full with cash as opposed to
receiving common stock and the ability to participate in a rights
offering.
* SFI Noteholders are allowed i) approximately 19% of the new
common stock and ii) rights to participate in the convertible
preferred stock offering to purchase as much as approximately 81%
of the new common stock, subject to dilution by management's long
term incentive plan. In contrast, the Debtors' Plan provides SFI
Noteholders with approximately 5% of the new common stock.
The letter states, in part, "The SFI Noteholder Plan allows the holders of SFI Notes to own nearly 100% of the new common stock as compared to merely 5% in the Debtors' plan. There is no question the SFI Noteholder Plan maximizes the recoveries of allcreditors of the Debtors, and more fairly allocates the value oftheir estates."
A hearing on the Disclosure Statement for the Debtors' Plan is currently scheduled for December 4, 2009.
White & Case LLP is representing the SFI Noteholders as legal counsel and Chanin Capital Partners LLC is serving as financial advisor.
The following correspondence was sent to SFI's board:
Re: In re Premier International Holdings Inc., et al., No. 09-12019
(CSS) (Bankr. D. Del.)
Gentlemen:
The signatories (collectively, the "SFI Noteholders") to the
enclosed commitment letter (the "Commitment Letter") are holders or
advisors to holders of over $500 million of the approximately
$870 million of unsecured notes (collectively, the "SFI Notes")
issued by Six Flags, Inc. ("SFI"). We are sending this letter to
you in your capacity as members of the board of directors of SFI
and in connection with the above-captioned chapter 11 cases of
SFI and its affiliated debtors (the "Debtors").
On November 20, 2009, White & Case LLP delivered to the
Debtors' legal and financial advisors the Commitment Letter under
which the SFI Noteholders have committed to fully backstop a $420
million preferred stock rights offering in connection with a
proposed plan of reorganization for the Debtors (the "SFI
Noteholder Plan"). The SFI Noteholder Plan proposes to pay in
full or otherwise reinstate all creditors of the Debtors'
estates, other than creditors of SFI, who will receive a
materially enhanced recovery under such plan as compared to the
Debtors' proposed Second Amended Joint Plan of Reorganization
(the "Debtors' Plan"). Copies of the term sheet for the SFI
Noteholder Plan and the Commitment Letter are attached hereto.
Specifically, the SFI Noteholder Plan provides the following:
(1) Lenders: While the Debtors' plan provides cash payment in full,
the SFI Noteholder Plan reinstates the term loan and pays off
the revolver in full in cash.
(2) SFO Notes: While the Debtors' plan provides the holders of 12
1/4% Senior Notes issued by Six Flags Operations, Inc ("SFO
Notes") with i) approximately 25% of the new common stock in
SFI and ii) rights to participate in the equity offering to
purchase an additional approximately 70% of the new common
stock (subject to dilution by management's long term incentive
plan), the SFI Noteholder Plan provides the holders of SFO
Notes with cash payment in full.
(3) SFI Notes: While the Debtors' plan provides the holders of SFI
Notes with approximately 5% of the new common stock, the SFI
Noteholder Plan provides the holders of SFI Notes with i)
approximately 19% of the new common stock and ii) rights to
participate in the convertible preferred stock offering to
purchase up to an additional approximately 81% of the new
common stock (subject to dilution by management's long term
incentive plan).
The SFI Noteholder Plan allows the holders of SFI Notes to own
nearly 100% of the new common stock as compared to merely 5% in the
Debtors' plan. There is no question the SFI Noteholder Plan
maximizes the recoveries of all creditors of the Debtors, and
more fairly allocates the value of their estates.
In light of the foregoing and the upcoming hearing on the
Disclosure Statement for the Debtors' Plan scheduled for December 4,
2009, we propose to meet with you, management of the Debtors and
their advisors as soon as possible to discuss the SFI Noteholder
Plan.
All rights of the SFI Noteholders are reserved.
We look forward to hearing from you.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: SFI Noteholders
By Staff
CONTACT: CONTACT: Perry Street Communications
Alex Wolfe
(214) 965-9955
Mobile: (417) 860-5850
awolfe@perryst.com
Jon Morgan
(214) 965-9955
Mobile: (212) 333-5525
jmorgan@perryst.com
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