AMC to raise fresh capital as liquidity troubles deepen
AMC Entertainment Holdings Inc, the world’s largest theater chain, said on Tuesday it would raise cash through a share offering and was working hard to restructure its debt and avoid seeking bankruptcy protection.
The company, whose shares fell nearly 11%, is looking to sell up to 15 million of its Class A common stock, but Chief Executive Officer Adam Aron told Reuters that there was no timeline on the plan.
AMC’s move to raise fresh capital comes after ratings agency S&P said earlier this month that the company had just six months of cash reserves.
“In the event the Company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities,” AMC said in a filing.
Big theater chains, including AMC and Cineworld Group, have reopened many of their locations, but fears of the virus and delays in major releases have kept audiences at bay.
The pandemic’s impact on small and mid-sized theater companies has been more pronounced, with a majority having little hope of pulling through the crisis.
AMC said it was expecting revenue for the third quarter to be about $119.5 million, below market expectation of $155 million. The company had raked in $1.32 billion in the year-earlier quarter.
AMC’s share offering will be managed by Goldman Sachs and Citigroup.