AMC Theatres has raised nearly $1bn in new equity and debt capital it announced today (Monday), meaning imminent bankruptcy is “off the table.”
The world’s largest cinema exhibitor, which has 128 theatres in the UK and Ireland and 536 Regal theatres in the US, has raised the finances from December 14, and of the $917m, more than half of that capital arrives in the form of equity that comes with selling 164.7 million new common shares. AMC raised another $411m in incremental debt that is scheduled to be paid off by mid-2023, according to the filing.
“This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter,” the company said, adding that its “financial runway has been extended deep into 2021.”
The struggling cinema chain saw its revenues plummet by more than 90 per cent in third-quarter figures in 2020. Prior to that, it had warned it could go bust by the end of 2020 or by early 2021 due to COVID-19.
Adam Aron, AMC chief executive and president, said: “Today, the sun is shining on AMC. After securing more than $1bn of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917m capital infusion to bolster and solidify our liquidity and financial position. This means that any talk of an imminent bankruptcy for AMC is completely off the table.”
By AMC’s own calculations the cash would allow it to survive until July of this year, assuming no increase in attendance levels.
It would need attendance to increase to 10 per cent of pre-coronavirus levels in the first quarter, 15 per cent in the second quarter, 65 per cent in the third quarter and 90 per cent in the fourth quarter to see out the year with its current funds, the firm said.
Aron added: “Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated. To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus.
“Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”