AMC Entertainment, the world’s largest movie-theater chain, has raised $917 million “to make it through this dark coronavirus-impacted winter,” in the company’s (dramatic) words.
As a result, President and CEO Adam Aron said on Monday that “any talk of an imminent bankruptcy” are now “completely off the table.”
The company had previously warned it will be out of cash by early 2021. Not anymore, it seems.
The funding is welcome news to shareholders. On Monday, AMC stock opened up +25%. Within the next 15 minutes, shares increased another 7%.
Of course, with such a low starting point — AMC shares closed Friday at $3.51 apiece — large swings (on a percentage basis) can be commonplace. Don’t expect that slight reality check to deter the determined Aron, however.
“Today, the sun is shining on AMC. After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position,” Aron said in a statement on Monday. “This means that any talk of an imminent bankruptcy for AMC is completely off the table.”
“Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated. To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus,” he continued. “Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”
The $917 million breaks down this way: $506 million in equity from the issuance of 164.7 million new shares of common stock, the previously announced $100 million secured in additional first-lien debut and “the concurrent issuance of 22 million new common shares to convert $100 million of second-lien debt into equity,” according to the company.
Finally AMC Entertainment has executed commitment letters for $411 million of incremental debt capital in place through mid-2023.