News blog
Lo-Q
- BY: Andrew Hore |
- POSTED: 14/06/2009 |
Lo-Q’s biggest customer, amusement park operator Six Flags, has filed for bankruptcy protection in the US.
The virtual queuing technology developer has generated the majority of its revenues from Six Flags parks and some of its growth is coming from adding additional Six Flags parks. North American revenues, likely to all come from Six Flags, accounted for £12.3m of Lo-Q’s 2008 revenues of £13.5m.
Six Flags has $2.37bn in debt which it is impossible to service even though it reduces its losses in 2008. It was required to make a payment of $300m to preferred stockholders in August 2009. Management could not agree a debt reorganisation with lenders and 37 subsidiaries have also filed for protection.
Much of the debt is in the form of bonds. There is some cash in the balance sheet.
CRT Capital reckons that the bankruptcy will cost Six Flags around $25m.
According to the New York times, Six Flags has the backing of the lenders to eliminate £1.8bn of debt and “slice off” the $300m preferred stock payment.
There is still a danger that visitor numbers could fall off.
At 75.5p a share, slightly lower than the recent high of 84p, Lo-Q is valued at £11.6m.
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