Exclusive: AMC Entertainment Explores New Capital Raise Amid Soaring Stock Market – Sources



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NEW YORK (Reuters) – AMC Entertainment Holdings Inc plans to raise more capital, including through another possible sell-off of shares, to weather the COVID-19 pandemic and profit from this week’s rally in its stocks, people familiar with the matter said Thursday.

FILE PHOTO: People walk past an AMC theater amid the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York City, New York, United States, January 27, 2021. REUTERS / Carlo Allegri

The world’s largest movie theater chain, with around 1,000 theaters worldwide, suffered unprecedented unrest after last year’s pandemic that forced it to temporarily close many venues as attendance plummeted in those that remained open. AMC avoided bankruptcy with a debt restructuring deal last summer with its creditors and private equity firm Silver Lake, and a series of other financial deals in recent months.

AMC said Monday it has raised $ 917 million since mid-December through equity and debt issuances. “This means that any discussion of impending bankruptcy for AMC is completely irrelevant,” CEO Adam Aron said in a statement accompanying the disclosure of the additional funds.

On Wednesday, AMC said it had raised an additional $ 304.8 million by selling stocks this week, capitalizing on an unprecedented social media-driven rally fueled by amateur traders taking on short-lived hedge funds. circulated its actions.

On Thursday, he said that Silver Lake and other creditors decided to convert debt holdings to equity in a deal that is expected to reduce AMC’s obligations by $ 600 million.

AMC plans to attempt to raise even more money to capitalize more on the frenzy of its actions, the sources said. While its shares fell about 57% on Thursday, wiping out most of the week’s gains, they are still up more than 300% since early January.

AMC said Monday that “its financial trail has been extended until 2021”. Still, he could use the proceeds of a new capital raise to further reduce his $ 5.5 billion debt at the end of September, the sources say.

The movie chain is considering a sell-off of shares as its stock remains high to raise hundreds of millions of dollars, which would give it additional cushion to navigate the pandemic, the sources say. Negotiation of more debt-equity swaps is also being considered to reduce the money it owes to creditors, the sources added, requesting anonymity as the matter is confidential.

AMC did not immediately respond to a request for comment.

The company has not made any final decisions on short-term financial transactions, and its calculations could change depending on how its stock performs in future trading sessions, the sources said.

AMC is consulting its creditors and taking further action as traditionally unpopular stocks have exploded into social media-fueled frenzies. GameStop Corp has been at the center of volatile trading.

Trade is disrupting markets and presenting unanticipated opportunities for weakened companies to consolidate their balance sheets in order to prepare for the additional challenges brought on by the pandemic.

Reporting by Mike Spector and Jessica DiNapoli; Edited by Richard Chang

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