Since the COVID-19 pandemic forced AMC Theatres to shut down its business in March, Hollywood and Wall Street had speculated that Chapter 11 bankruptcy was just around the corner for the world’s largest cinema operator.
For now, the beleaguered company can breathe, according to its CEO.
AMC Chief Executive Adam Aron on Monday said in a statement that “any talk of an imminent bankruptcy for AMC is completely off the table” after the company disclosed raising $917 million in fresh capital since December to sustain itself through the coronavirus crisis.
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The company said it raised $506 million in equity by issuing 164.7 million new common shares, and also executed commitment letters for $411 million in debt by refinancing a European revolving credit facility.
The company said the new cash, raised through a combination of debt and equity, would extend its financial runway “deep into 2021.” AMC had previously warned investors that bankruptcy was a possibility if the company failed to replenish its cash reserves by selling stock. AMC, which was acquired by China’s Dalian Wanda Group in 2012, raised more than $1 billion from April through November.
Shares of AMC, which have languished during the public health disaster, surged 26% to $4.44 in midday trading.
The financial lifeline comes as the picture for the immediate future continues to darken for theaters as studios hold back their films for when patrons are vaccinated and ready to return to the multiplex.
Last week, Metro-Goldwyn-Mayer Studios delayed its $250-million James Bond film “No Time to Die” from its April release date until October. That led others studios to delay their films, including Walt Disney Co.’s “The King’s Man,” Sony Pictures’ “Cinderella” and Paramount Pictures’ “A Quiet Place Part II.”