Six Flags says could exit bankruptcy in March

NEW YORK (Reuters) - U.S. theme park operator Six Flags Inc SIXFQ.OB could emerge from bankruptcy as soon as March under an $830 million financing deal it is arranging with lenders, the company said in a regulatory filing on Thursday.

The company said it would seek court approval of its proposed reorganization plan in U.S. Bankruptcy Court in March.

Six Flags filed for bankruptcy last June as fewer people attended its amusement parks, leaving it struggling with heavy debt.

Six Flags’ reorganization plan is supported by a steering committee of its secured creditors and led by investment firm Avenue Capital Management, which would take control of the company under the plan.

But the company’s official committee of unsecured creditors opposes the plan saying it undervalues the theme park operator.

A group of junior noteholders led by Stark Investments want to offer their own plan to take control of the company. It would give back more money to certain groups of creditors.

The court hearing on the Avenue-led reorganization plan is expected to last two weeks.

A lawyer for the Stark-led group was not available to comment.

The company had filed for bankruptcy with an original plan that transferred almost all its stock to senior lenders, including JPMorgan Chase & Co JPM.N in return for cutting its debt. It threw its support behind the Avenue-led plan in November.

Six Flags said in the filing that it expects its 2009 revenue to be down 10.9 percent from the previous year at $111.1 million.

The company said its exit financing terms would include a $150 million revolving credit facility, a $680 million term loan, and a financing commitment of $150 million from Time Warner Inc TWX.N. Time Warner characters, such as Bugs Bunny, are featured at the company's theme parks.

Six Flags would also conduct a $450 million rights offering, that would leave Avenue with control of the company. The junior noteholders would get a 7.3 percent equity stake in the reorganized company, under the proposed deal.

Six Flags has said in court documents that it does not believe the Stark-led plan has sufficient capital to fund the company’s operations and would result in protracted litigation.

Six Flags’ lenders were holding a meeting on Thursday to discuss the financing, according to Reuters Loan Pricing Corporation [ID:nRLP61287a].

The case is In re: Premier International Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-12019.

Reporting by Emily Chasan