Adam Aron, CEO of the world’s biggest chain of theaters – AMC Entertainment Holdings, disclosed Tuesday that the company had raised $200 million in funding, but the proceeds were still $550 million short of the targeted $750 million threshold, reports CNBC.
What Happened: The pandemic forced the theatre chain into a cash crunch. In December, CNBC reported that the company needs to secure an additional $750 million to meet its liquidity requirement in 2021.
Talking about the shortfall, Aron said that “We need to raise more, but we’re working hard to do that, and we’ve laid out a plan and a blueprint to get there. Whether we get there or not, only time will tell,” CNBC quoted.
AMC secured $100 million in debt funds last month from Mudrick Capital Management — an event-driven investment firm specializing in distressed credit.
Why Does It Matter: With the mounting liquidity concerns, AMC’s stock dipped to its 52-week low of $1.91 on Tuesday. Starting from $7.30 at the beginning of January 2020, the stock has shed 72% during the year.
AMC did not receive grants from the $15 billion COVID-19 relief package because it is a publicly traded company with locations in more than 10 states, CNBC noted.
Almost one-third of AMC’s theatres, including New York City and parts of California, remain closed, whereas the other two-thirds are operating at a limited capacity.
CNBC says that the theatre is revisiting its lease and rental agreement with landlords. Inability to come to an agreement could force the company to commence bankruptcy proceedings.
Price Action: AMC shares closed 1.49% lower at $1.98 on Tuesday.
This story originally appeared on Benzinga.
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