Six Flags files for bankruptcy

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Six Flags, the US theme park giant that planned to develop one of DubailandDubailand's largest attractions, is seeking bankruptcy protection after its shares slumped 86 per cent in a year. The fate of the multibillion-dollar Six Flags project in Dubai was unclear yesterday, after the theme park operator filed a petition in a Delaware bankruptcy court that listed assets of US$3 billion (Dh11.01bn) and debts of $2.4bn.

Six Flags and TatweerTatweer, the owner of DubailandDubailand and part of Dubai Holding, signed an agreement in March last year to develop "thrill-driven" parks across the Gulf region.

"Six Flags are a strong consumer brand with world-class attractions that TatweerTatweer remains committed to bringing to Dubai. While we are aware of the restructuring, we do not comment on the financial details of any of our partners," TatweerTatweer said.

Six Flags Dubailand was the first of several projects that the firm was planning to develop. The conceptual master plan was finalised in May last year and the first phase of the theme park was scheduled to be completed in 2011 with 30 rides and projections of an estimated three million visitors every year.

Under the agreement, Six Flags Dubailand was to include entertainment franchises such as the children's musical group Wiggles and professional skateboarder Tony Hawk, and Six Flag's original programming such as Operation Spygirl, branded restaurants, hotels and retail outlets.

The vast DubailandDubailand project is a key part of the emirate's efforts to attract 15 million tourists by 2015 and includes a collection of multibillion-dollar projects such as the DreamWorks animation park, Universal Studios and City of Arabia. But the global slowdown in travel, falling property prices and tighter finance have hit some of the attractions planned for the 27,000-hectare site.

Dubai's hotels and apartments accommodated a total of about 7.53 million guests last year compared with about 6.95 million in 2007, according to government data.
"It will be interesting to see whether it can rise from ashes if someone else takes over Six Flags and then continues the relationship with TatweerTatweer," said Miles Payne, a partner at Strutt and Parker, an international property consultancy based in Dubai.

Six Flags sought bankruptcy protection three-and-a-half years after Daniel Snyder, the owner of the Washington Redskins, became chairman and hired new managers in an attempt to return the firm to profitability. Mr Snyder began a shake-up of Six Flags in late 2005 after winning three seats on the board. The 48-year-old company has not posted an annual profit since 1998 and had losses of $558.8 million in the two years after Mr Snyder became chairman.

Six Flags shares have fallen 86 per cent in the past 12 months as investors have grown sceptical about the company's ability to refinance preferred income equity redeemable shares, or PIERS, before their August redemption date.

Six Flags said it was seeking court approval for a pre-arranged reorganisation plan that would cut its debt by about $1.8bn and eliminate more than $300m of preferred stock obligations. The reorganisation plan has yet to be filed with the court.

Any debt-for-equity exchange offers by the company have ended due to the bankruptcy filing, Six Flags said in the statement.

By Sara Hamdan and Sarmad Khan

© The National 2009