AMC Seeks Stock Sale to Raise $50 Million to Stave off Bankruptcy



  • AMC is aiming to offer up to 20 million class A shares to protect almost $50 million in brand-new capital.
  • The world’s biggest cinema chain, which has been knocked by the coronavirus pandemic, is set to report quarterly earnings Monday afternoon.
  • Last month, it alerted financiers that its diminishing money pile might push it to file for Chapter 11 insolvency.

AMC, starved for money, is looking to offer up to 20 million class A shares to secure nearly $50 million in brand-new capital, according to an SEC filing published Monday.

Shares of the company– the world’s biggest cinema chain– fell nearly 7% in early trading Monday. The company is set to report quarterly profits Monday afternoon.

The filing is simply the latest fundraising attempt by AMC. Like others in the market, the company has been slammed by the coronavirus pandemic. First, it was forced to shutter hundreds of theaters, and then after resuming, saw clients stay at home and major Hollywood smash hits delay their openings.

Last month, AMC alerted investors that its dwindling money pile might press it to declare Chapter 11 personal bankruptcy.

Heading into the pandemic, AMC currently had $4.75 billion in financial obligation, which is collected from outfitting its theaters with high-end seating and from buying competitors like Carmike and Odeon.

The movie theater chain has been concentrated on fundraising for months. It has currently renegotiated its financial obligation to enhance its balance sheet this year and has been checking out a variety of ways to boost its liquidity.

At an optimal offering cost of $2.39 each, selling 20 million shares would raise $47.7 million for AMC.

The company needs to hang on enough time for brand-new material to show up in theaters. The next big function is “The Croods: A New Age” which is slated for Thanksgiving. Theater chains are holding out hope that “Free Guy” and “Wonder Woman 1984” hold their December release plans. Without these brand-new films, spectators will not venture far from their sofas.

AMC and other theaters have been hemorrhaging money in order to survive. Last month, AMC released a preliminary profits report that stated the company had made around $119.5 million in revenue throughout the three-month period ended Sept. 30. That’s a high fall from the $1.32 billion gain AMC tallied during the same period last year.

For the first 9 months of 2020, AMC stated it took in profits of $1.08 billion, a fraction of the $4.02 billion a year earlier.

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