AMC looks for stock sale to raise $50 million to fend off personal bankruptcy

AMC seeks stock sale to raise $50 million to stave off bankruptcy

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An individual uses a protective face outside the AMC 34th Street 14 theater as the city continues Phase 4 of re-opening following limitations enforced to slow the spread of coronavirus on July 31, 2020 in New York City.

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AMC, starved for money, is aiming to offer up to 20 million class A shares to protect almost $50 million in brand-new capital, according to an SEC filing released Monday.

Shares of the business — the world’s biggest movie theater chain — fell almost 7% in early trading Monday. The business is set to report quarterly revenues Monday afternoon.

The filing is simply the most recent fundraising effort by AMC. Like others in the market, the business has actually been knocked by the coronavirus pandemic. First it was required to shutter numerous theaters, and after that after resuming, saw consumers stay at home and significant Hollywood hits postpone their openings.

Last month, AMC alerted financiers that its diminishing money stack might press it to declare Chapter 11 personal bankruptcy.

Heading into the pandemic, AMC currently had $4.75 billion in financial obligation, which it accumulated from equipping its theaters with high-end seating and from purchasing rivals like Carmike and Odeon.

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

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

The business requires to hang on enough time for brand-new material to show up in theaters. The next huge 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 strategies. Without these brand-new movies spectators will not venture far from their sofas.

AMC and other theaters have actually been hemorrhaging cash in order to survive. Last month, AMC launched an initial revenues report that stated the business had actually made around $119.5 million in earnings throughout the three-month duration ended Sept. 30. That’s a high fall from the $1.32 billion gain AMC tallied throughout the very same duration in 2015.

For the very first 9 months of 2020, AMC stated it took in earnings of $1.08 billion, a portion of the $4.02 billion a year previously.