Struggling AMC Entertainment said early Monday it has raised or signed commitments for $917 million including additional financing since December, calling it “enough cash to “make it through this dark, coronavirus-impacted winter.”
“This means that any talk of an imminent bankruptcy for AMC is completely off the table,” said CEO Adam Aron in a statement.
It was striking news after months of uncertainty as to whether the nation’s largest cinema chain could continue as a going concern. AMC said that it raised $506 million of equity, from the issuance of $164.7 million new common shares. That follows a previously announced securing of $100 million of additional first-lien debt and the concurrent issuance of 22 million new common shares to convert $100 million of second-lien debt into equity.
In addition, said it has executed commitment letters for $411 million of
incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility.
“Based on a variety of assumptions, including future attendance levels, the company estimates that its financial runway has been extended deep into 2021,” AMC said.
AMC also is presuming that it will continue to make progress in its
ongoing dialogue with theatre landlords about the amounts and timing of owed theatre lease payments.
“Given the push to vaccinate the general population, an increase in cinema attendance seems likely, although AMC notes that no one knows for sure the future course of this and other strains of the coronavirus, and
therefore thoughts as to future cash needs of AMC are uncertain. Investors are cautioned accordingly,” the company said.
“Today, the sun is shining on AMC,” said Aron.
“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. To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based
vaccination program.”
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