NEW YORK (Reuters) – AMC Entertainment Holdings Inc. is exploring raising more capital, including another possible share sale, to overcome the COVID-19 pandemic and take advantage of this week’s concentration in its shares, they reported Thursday people familiar with the matter. .
The world’s largest cinema chain, with nearly 1,000 cinemas worldwide, suffered unprecedented turmoil after last year’s pandemic forced it to temporarily close many venues, while attendance was reduced. to those who remained open. AMC avoided bankruptcy through a debt restructuring deal last summer with its creditors and private equity firm Silver Lake, and a number of other financial transactions in recent months.
AMC said Monday it had raised $ 917 million since mid-December through equity and debt issues. “This means that any conversation about an impending bankruptcy for AMC is completely off the table,” chief executive Adam Aron said in a statement accompanying the disclosure of the additional funds.
On Wednesday, AMC said it raised an additional $ 304.8 million by selling shares this week, reaching an unprecedented rally driven by social media driven by amateur traders taking hedge funds that had reduced their shares.
On Thursday, he said Silver Lake and other creditors decided to convert equity holdings into equity debt in a transaction that is expected to reduce AMC’s obligations by $ 600 million.
AMC is considering trying to raise even more money to further capitalize on the frenzy of its actions, sources said. Although its shares fell about 57% on Thursday, erasing most of the week’s earnings, they continue to rise more than 300% since early January.
AMC said Monday that its “financial track has been expanded to 2021.” Still, it could use the proceeds of a further capital increase to further cut its $ 5.5 billion debt pile by the end of September, according to sources.
The film chain is considering selling shares, while its shares remain high to reach hundreds of millions of dollars, which would provide it with an additional cushion to navigate the pandemic, sources said. It is also considering negotiating more debt swaps for shares to reduce the money owed by creditors, the sources added, who requested anonymity because 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 vary depending on the performance of its shares in the coming trading sessions, sources said.
AMC is consulting with its creditors and taking other action, as traditionally unpopular actions have skyrocketed in frenzy fueled by social media. GameStop Corp has been at the center of volatile trading.
Trade is turning markets upside down and presenting unforeseen opportunities for weakened companies to tip the balance sheets to meet additional challenges posed by the pandemic.
Reports by Mike Spector and Jessica DiNapoli; Edited by Richard Chang