H Partners & Six Flags

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1-What is the value of Six Flags at the end of 2009? Ans. The valuation of Six Flag is $ 4.58 Billion. The valuation is given the excel calculated. 2-How does this value affect the choice of securities in which to invest? Ans. This valuation shows that the cost of the equity is more than that of the cost of the debt. The H partners should finance the six flags through debt rather than that of the equity. The plan assigned 95% of the Company’s equity to SFO bondholders and 5% to SFI bondholders. As banks were to be repaid in full, they were deemed to be “unimpaired” and therefore not entitled to vote on the plan. Plan enterprise value had increased from $1.25 billion to approximately $1.4 billion. 3-Evaluate the SFO Plan and the division of claims. Why does this plan include a rights offering? What are the risks and opportunities involved? Ans. Confirmation of the plan of reorganization was expected to occur in March 2010, with Six Flags emerging from bankruptcy shortly thereafter. The plan assigned 95% of the Company’s equity to SFO bondholders and 5% to SFI bondholders. As banks were to be repaid in full, they were deemed to be “unimpaired” and therefore not entitled to vote on the plan. Plan enterprise value had increased from $1.25 billion to approximately $1.4 billion. The Long-Term Incentive Plan would remain in place and dilute debt holders. Daniel Snyder would be reThe facilities consisted of a $150 million in a revolving credit facility, as well as a $680 million term loan. In addition, SFO bond holders would contribute up to $450 million of new equity through a rights offering.placed as Chairman of the Board by Marc Lasry, founder of hedge fund Avenue Capital 4-Frame your well-supported recommendation to H-Partners. Ans. The S&P 500 index up by over 20 percent since Six Flags’ initial bankruptcy filing. Debt markets had begun to reopen for

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