People are walking outside the AMC 34th Street 14 cinema, while the city is reopening Phase 4 after the restrictions to slow down the spread of coronavirus on September 4, 2020 in New York.
Noam Galai | Getty Images
The film chain AMC hopes to raise $ 125 million in new capital to ward off bankruptcy by selling 50 million shares in a new round of financing, the company said on Wednesday.
The world’s largest cinema chain raised $ 104 million earlier this month after selling about 38 million of 200 million available shares. The company is trying to rebuild its balance sheet to withstand the prolonged economic downturn as the coronavirus pandemic drags on for 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 cash-strapped cinema chain still needs at least $ 750 million in extra liquidity to finance cash needs by 2021.
The company has reiterated in several SEC filings that bankruptcy is a possibility if it can no longer raise funds.
“We intend to use the net proceeds from the sale of ordinary Class Stock A offered by this prospectus for general corporate purposes, which are the repayment, refinancing, redemption or repurchase of existing debt or capital stock, working capital, capital expenditure and other investments, ‘AMC said in the Wednesday submission.
Although the Covid-19 crisis has plagued theaters since March, perhaps no chain has been hit more than AMC. The company entered the pandemic with nearly $ 5 billion in debt, which it amassed by equipping its theaters with luxury seats and buying competitors such as Carmike and Odeon.
AMC has been focusing on fundraising for months. He has already renegotiated his debt to improve his balance sheet this year and is exploring several options for additional liquidity. It is also trying to figure out ways to increase attendance, even if the outbreak in the US worsens
The company’s shares closed 5.7% on Wednesday and have fallen 70% since January.