Credit & Capital

AMC Raises $917 Million to Keep Theaters Open

The new equity and debt capital "means that any talk of an imminent bankruptcy for AMC is completely off the table."
Matthew HellerJanuary 26, 2021

Shares of AMC Entertainment soared on Monday after the theater chain said it had raised enough new capital to see it through the coronavirus pandemic, assuming moviegoing rebounds in the second half of 2021.

AMC, the nation’s largest theater chain, had warned last month that it needed to raise at least $750 million to stay open and might go bankrupt amid a pandemic that has shuttered theaters around the country.

In a regulatory filing, the company said it had surpassed that number, raising $917 million in new equity and debt capital since mid-December that “should allow the company to make it through this dark coronavirus-impacted winter,” with a financial runway extending “deep into 2021.”

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“This means that any talk of an imminent bankruptcy for AMC is completely off the table,” CEO Adam Aron said in a news release.

AMC raised $506 million of new equity by issuing 164.7 million new shares. It also added commitments for $411 of incremental debt through the upsizing and refinancing of a European revolving credit facility.

On news of the financing, AMC shares rose 25.9% to $4.42 in the regular trading session Monday and another 10.2% to $4.87 in the extended session.

AMC warned that “There can be no assurance that the attendance level and other assumptions used to estimate our liquidity requirements and future cash burn will be correct, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.”

AMC estimates it had about $308 million in cash and cash equivalents as of Dec. 31, down from $417.9 million three months earlier. “Our current cash burn rates are not sustainable,” it said.

As CNBC reports, movie theaters were shuttered due to rising COVID-19 cases “and then, when they reopened, moviegoers were hesitant to return. Cinemas are hoping that an influx of new content from Hollywood, declining COVID-19 cases, and a rise in vaccinations will give consumers the confidence to come back.”

Aron told CNN that AMC has “already assumed that moviegoing would be quite light in the first half of 2021” but “The combination of new movie titles and vaccination should [mean] that the second half is a much stronger moviegoing environment than the first half.”