Movie theater chain AMC Entertainment, said the business will remain afloat thanks to a $917 million contribution of cash. “Today, the sun is shining on AMC," Adam Aron, AMC CEO and President said. "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."
More than half of the new funding, USD 506 million, was garnered from investors who purchased AMC shares during the company's December stock offering.The remaining amount comes from a USD 411 million line of credit AMC took out through its European subsidiary, Odeon. "This means that any talk of an imminent bankruptcy for AMC is completely off the table," Aron said in a statement.
The equity also derivces from the issuance of 164.7 million new common shares, along with the previously announced securing of USD 100 million of additional first-lien debt and the concurrent issuance of 22 million new common shares to convert USD 100 million of second-lien debt into equity. In addition, the Company has executed commitment letters for USD 411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility. On this new European debt, AMC has the option of paying non-cash PIK interest throughout its duration. All amounts are before factoring in transaction costs, investment banking fees, and original issue discounts.
The company estimates that its financial runway has been extended deep into 2021, presuming that it will continue to make progress in its ongoing dialogue with theatre landlords about the amounts and timing of owed theatre lease payments. Shares of AMC, based in Leawood, Kansas, rose as much as 39% to $4.88 in New York, their highest since late November. The stock traded at historic lows for much of 2020 as the Covid-19 crisis engulfed the company. Management started issuing “going concern” notices in June, warning the company risked running out of cash. “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,” Aron said.