AMC Entertainment Holdings Inc. shares AMC,
skyrocketed 36% in pre-market negotiations on Monday after the world’s largest cinema chain operator said it had raised $ 917 million in debt and equity to help it overcome a coronavirus-impacted winter. AMC said it raised $ 506 million in shares by issuing 164.7 million new shares. This is combined with a previously announced additional $ 100 million guarantee debt and the simultaneous issue of 22 million new common shares to convert $ 100 million of secondary guarantee debt into equity. The company has pledge letters of $ 11 million of incremental debt capital in effect until mid-2023, unless paid in advance, through the increase and refinancing of a European revolving credit line. The company may pay non-monetary PIK (payment in kind) interest over the duration of the European debt. “Based on a variety of assumptions, including levels of participation in the future, the company estimates that its financial track has been extended to 2021,” said AMC in a statement. “AMC also assumes that it will continue to make progress in its ongoing dialogue with theater owners about the amounts and terms of payments due on theater rent.” Chief Executive Adam Aron said the new financing means that any talk of impending bankruptcy “is completely out of the question.” AMC has been raising capital repeatedly through the pandemic to increase its liquidity and stay afloat. Shares fell 48% in the last 12 months, while the S&P 500 SPX,
gained 16.6%.
