AMC hopes to raise $125 million in fresh funding round as it fights bankruptcy
People are strolling outside the newly boarded AMC 14th 34th Street movie theater as the city resumes Phase 4 reopening after restrictions were imposed in New York City on September 4, 2020 to slow the spread of the coronavirus.
Noam Galai | Getty Images
The cinema chain AMC hopes to raise $ 125 million in fresh capital by selling 50 million shares in a new round of financing to avert bankruptcy, the company said on Wednesday.
The world’s largest cinema chain raised $ 104 million earlier this month after selling around 38 million of the 200 million available shares. The company is looking to prop up its balance sheet to weather the ongoing economic downturn as the coronavirus pandemic drags into a second year and threatens the viability of the film industry.
Earlier this month, AMC received a $ 100 million investment from Mudrick Capital Management, but the financially troubled movie theater chain still needed at least $ 750 million in additional cash through 2021 to fund its cash needs.
The company has reiterated in several SEC filings that bankruptcy is possible if it cannot raise more money.
“We intend to use the net proceeds from the sale of the Class A common shares offered in this prospectus for general corporate purposes, including repayment, refinancing, redemption or repurchase of existing debt or capital, working capital, investments and other investments,” AMC said in the Wednesday filing .
While the Covid-19 crisis has ravaged cinemas since March, perhaps no chain has been hit harder than AMC. The company went into the pandemic with nearly $ 5 billion in debt, which it amassed by adding luxurious seating to its theaters and buying out rivals like Carmike and Odeon.
AMC has focused on fundraising for months. She has already renegotiated her debt to improve her balance sheet this year and is exploring various options for additional liquidity. Attempts are also being made to find ways to increase visitor numbers even if the US outbreak worsens
The company’s shares closed 5.7% on Wednesday and have plummeted 70% since January.