Mike Specter and Jessica Dinapoli
New York (Reuters)-AMC Entertainment (NYSE :) Holdings to survive the COVID-19 pandemic and raise more capital, including through yet another stock sale, to take advantage of this week’s stock price hike I’m looking for it. The problem said Thursday.
With about 1,000 cinemas in the world, the world’s largest cinema chain suffered unprecedented turmoil after many venues were temporarily closed due to a pandemic last year. AMC stopped bankruptcy last summer through a debt restructuring agreement with creditors and private-equity fund Silver Lake, as well as a series of other financial transactions in recent months.
AMC said on Monday that it had raised $ 917 million from mid-December through stock and debt issues. “This means that the story of AMC’s imminent bankruptcy is completely off the table,” CEO Adam Aaron said in a statement accompanying the disclosure of additional funding.
AMC said Wednesday that it raised another $ 304.8 million by selling its shares this week and attended an unprecedented social media-led rally led by amateur traders using hedge funds that shorted their shares. It was.
On Thursday, Silver Lake and other creditors said they had decided to convert their debt into shares in a deal that was expected to reduce AMC’s obligations by $ 600 million.
Sources say AMC is considering raising more money to further leverage its stock frenzy. Shares fell about 57% on Thursday, eradicating most of this week’s rise, but still rising more than 300% since early January.
“The financial runway has been extended until 2021,” AMC said on Monday. Still, sources say it could use revenue from new funding to further reduce its $ 5.5 billion debt as of the end of September.
Cinema chains are considering selling their shares while their shares remain high to win hundreds of millions of dollars. And it will give it an additional cushion to navigate the pandemic. More equity debt swap negotiations are also being considered to reduce the amount payable to creditors, sources added, demanding anonymity because the issue is confidential.
AMC did not immediately respond to the request for comment.
The company has not made a final decision on short-term financial transactions, and calculations may change depending on the performance of stock prices in future trading sessions, sources said.
AMC has consulted with creditors and is taking other steps as traditionally unpopular stocks surge in the social media-inspired enthusiasm. GameStop Corp (NYSE :) is at the heart of volatile trading.
Trading is disrupting the market, offering the unexpected opportunity for weakened companies to strengthen their balance sheets to prepare for the additional challenges posed by the pandemic.
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Exclusive: AMC Entertainment seeks new funding amid a surge in stocks
https://www.investing.com/news/stock-market-news/exclusive-amc-entertainment-explores-new-capital-raise-amid-stock-surge–sources-2402788 Exclusive: AMC Entertainment seeks new funding amid a surge in stocks