AMC Entertainment on Wednesday filed for an order to sell up to 50 million more shares in a continuing quest to remain solvent while overcoming the pandemic.
The country’s largest theater chain registered the shares in an SEC filing this morning, adding to the 200 million previously registered. The company said it raised $ 104 million on December 28 through the sale of shares under that program, at an average price of $ 2.81 per share. He warned potential investors again that bankruptcy remains a risk if it cannot continue to raise the funds it needs while waiting for the theater business to recover.
The stock fell nearly 5% on Wednesday morning.
“Our ability to obtain additional liquidity, which, if not realized or insufficient to generate the material amounts of additional liquidity that will be required until we can achieve more normalized levels of operating revenues, would likely result in a judicial search or extrajudicial restructuring of our liabilities and , in the event of future liquidation or bankruptcy, the holders of our common shares and other securities would likely suffer the total loss of their investments, ”said the document.
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AMC’s shares plummeted this year, with the coronavirus pandemic ravaging cinema trips by closing cinemas, reducing its capacity and forcing Hollywood studios to change their opening times and reinvent the windows of cinemas.
The shares still resisted a major recovery in the rest of the sector on Monday, after a better-than-expected opening over the Christmas weekend. Wonder Woman 1984 the investor’s concern about liquidity.
The network said several weeks ago that it has funds to last until the beginning of 2021, but it would need at least $ 750 million in cash to survive next year.
Three major AMC debt holders, including Apollo Global Management, reportedly encouraged the company to file a Chapter 11 order, promising $ 1 billion in borrower financing that would keep the company running. These so-called first-rate bondholders would be the first in line to recover in the event of bankruptcy. The shareholders are the last in line.
Last week, AMC Entertainment revealed plans to change its board structure in an agreement with majority shareholder Wanda America Entertainment, a division of China’s Dalian Wanda Group.