Theater chain AMC raises nearly $1BILLION in funding to survive the pandemic winter and says bankruptcy is ‘completely off the table’
- AMC said on Monday that it had raised $917 million in debt and equity financing
- Theater chain says any talk of imminent bankruptcy is now off the table
- Shares of AMC jumped 40% on Monday as investors welcomed the news
- Theaters have been among the hardest hit businesses in the COVID-19 pandemic
AMC Entertainment Holdings has raised an additional $917 million to help cushion the blow from the pandemic, and said that that any talk of an imminent bankruptcy is ‘completely off the table’.
The company’s shares, which have lost nearly half their value in the last 12 months as it was forced to shut theaters during the virus outbreak, jumped as much as 39 percent to $4.88 on Monday.
‘Today, the sun is shining on AMC,’ CEO Adam Aron said in a statement. ‘This [new financing] means that any talk of an imminent bankruptcy for AMC is completely off the table.’
The new funding includes $506 million in equity raised through new stock issues, and $411 million in debt capital through the refinancing of AMC’s European credit facilities. The key investors and creditors were not disclosed.
AMC Entertainment Holdings has raised an additional $917 million to help cushion the blow from the pandemic. Theaters in New York City, like the one above, remain closed
While Aron allayed investor fears by repeatedly raising fresh funds, the company’s shares are still well below pre-pandemic levels.
AMC, which also operates Britain’s Odeon cinemas, has reopened most of its theaters but new social distancing measures and a wider malaise over visiting public places have hit the company hard.
The COVID-19 pandemic devastated the film business in 2020, and ticket sales in the United States and Canada sunk 80 percent.
‘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,’ Aron said.
Nearly 22 million doses of COVID-19 vaccines have been administered in the U.S. as of Sunday morning, with the initial doses being given to health workers and older citizens.
New York-based AMC said it had raised capital by issuing new shares, while executing commitment letters for more debt.
AMC added it was estimating that its ‘financial runway has been extended deep into 2021’, but warned investors on the uncertainty of its future cash needs.
AMC shares jumped as much as 39 percent to $4.88 on Monday on the news
The theater industry suffered another blow last week when the global release of the James Bond blockbuster No Time To Die was again postponed to October from April
AMC is the world’s largest theater operator with around 1,000 venues and 10,700 screens globally.
It has kept many of its theaters open in the United States despite the acceleration of the pandemic and a drop in ticket sales, but remains deprived of the two biggest markets in the country — New York and Los Angeles — where the authorities have yet to allow theaters to reopen.
AMC has yet to release its 2020 full-year financial results but posted a net loss of $3.6 billion in the first nine months of the year.
The theater industry suffered another blow last week when the global release of the James Bond blockbuster No Time To Die was again postponed to October from April.
The movie’s new debut date is October 8, according to an announcement on the James Bond website and Twitter feed.
No Time To Die, from MGM and Comcast Corp’s Universal Pictures, had originally been set to hit the big screen in April 2020 before moving to November 2020 and then April 2021.
The film, which cost an estimated $200 million to produce, marks actor Daniel Craig’s last outing as agent 007.