An earlier version of this report contained a typo in the amount the AMC has in the letters of engagement. It has been corrected.
AMC Entertainment Holdings Inc. shares AMC,
climbed 36% in premarket trading on Monday, after the world’s largest cinema chain operator said it had raised $917 million in debt and equity to help it weather a hit winter by coronaviruses. AMC said it raised $506 million in equity by issuing 164.7 million new shares. This is combined with an additional $100 million of previously announced senior debt and the concurrent issuance of 22 million new common shares to convert $100 million of second lien debt into equity. The company has letters of commitment for $411 million of additional debt capital in place through mid-2023, unless repaid before then, through the raise and refinancing of a European revolving credit facility. The company can pay non-monetary PIK (payment in kind) interest for the duration of the European debt. “Based on various assumptions, including future attendance levels, the company believes its financial track has been extended through 2021,” AMC said in a statement. “AMC also assumes that it will continue to make progress in its ongoing dialogue with theater owners about the amounts and timing of theater lease payments due.” Chief executive Adam Aron said the new funding means any talk of impending bankruptcy “is completely irrelevant”. AMC has raised capital several times during the pandemic to bolster its liquidity and stay afloat. Stocks have fallen 48% in the past 12 months, while the S&P 500 SPX,
gained 16.6%.
