AMC Entertainment Holdings Inc. part AMC,
rose 36% in pre-trade on Monday, after the world’s largest cinema operator said it had raised $ 917 million in debt and equity to get it through a coronavirus-ravaged winter. AMC said it raised $ 506 million in equity by issuing 164.7 million new shares. This is combined with a previously announced additional $ 100 million first lien debt and the simultaneous issuance of 22 million new ordinary shares to convert $ 100 million of second lien debt into equity. The company has promissory notes for $ 11 million in incremental debt capital set up by mid-2023, unless repaid ahead of time, by the size and refinancing of a European revolving credit facility. The company cannot pay cash PIK (payment in kind) during the duration of the European debt. “Based on a variety of assumptions, including future attendance levels, the company estimates that its financial lane has been extended to 2021,” AMC said in a statement. “AMC also assumes that it will continue to make progress in its ongoing discussions with landlords over theater rent payments.” CEO Adam Aron said the new funding means any talk of imminent bankruptcy is completely off the table. AMC has repeatedly raised capital through the pandemic to bolster its liquidity and keep its head above water. Shares have fallen 48% over the past 12 months, while the S&P 500 SPX,
achieved 16.6%.
