People walk out of the new AMC 34th Street 14 movie theater as the city continues phase 4 reopening following restrictions imposed to curb the spread of coronavirus on September 4, 2020 in New York City.
Noam Galai | Getty Images
AMC expects to raise $ 125 million in new capital to avoid bankruptcy by selling 50 million shares in a new round of financing, the company said Wednesday.
The world’s largest film chain raised $ 104 million earlier this month after selling approximately $ 38 million in available stock. The company is trying to bolster its balance sheet to withstand the prolonged economic recession, as the coronavirus pandemic approaches its second year and jeopardizes the viability of the film industry.
Earlier this month, AMC received a $ 100 million investment from Mudrick Capital Management, but the cash-strapped movie chain still needed at least $ 750 million in additional liquidity to fund its requirements. effective until 2021.
The company has reiterated in several SEC filings that bankruptcy is a possibility if the company cannot raise more funds.
“We intend to use the net proceeds from the sale of the Class A common shares offered by this prospectus for general corporate purposes, which may include the return, refinancing, repayment or repurchase of debt or l ‘existing capital stock, working capital, other investments,’ the company said in Wednesday’s presentation.
Although the Covid-19 crisis has affected cinemas since March, perhaps no theater channel has been affected more than AMC. The company headed into the pandemic with nearly $ 5 billion in debt, which it had amassed by equipping its theaters with luxury seats and buying competitors such as Carmike and Odeon.
AMC has been focusing on fundraising for months. This year he has already renegotiated his debt to improve his balance sheet and is exploring several options for additional liquidity. It is also trying to figure out ways to increase attendance, even as the outbreak worsens in the United States.
Shares of the company fell about 6% on Wednesday in trading and fell 70% since January.