AMC is inching closer to a deal that would help rescue it from a near-term bankruptcy filing, The Wall Street Journal reported. With this, the company would be rejecting a competing financing offer from senior lenders, including Apollo Global Management, sources said.
The proposal “would require bondholders to provide a $200 million senior loan and to swap their unsecured claims at a discount for new, second-lien debt,” according to the newspaper. Meanwhile, major investor Silver Lake Group would swap for first-lien debt about $600 million in convertible bonds.
But senior lenders including Apollo, Davidson Kempner Capital Management and Ares Management Corp. don’t like that idea — because it would let Silver Lake have a portion of the collateral pledged to them.
So, they’ve come up with a counteroffer, which AMC is close to rejecting, the Journal reported.
Last month, AMC announced a health and sanitization plan to use when it restarts operations at roughly 450 cinemas in the United States on July 15 and a further roughly 150 cinemas in time for the release of “TENET” and “Mulan.” The company said its “AMC Safe & Clean” effort was created with the guidance of public health experts.
“From the moment we made the decision back in March to temporarily shutter our theaters, we immediately began to formulate a comprehensive, effective and responsible health and sanitation plan,” AMC CEO and President Adam Aron said. “This has been the core element to all of our discussions about again opening our doors to moviegoers.”
AMC also warned investors early last month that it might not be able to survive “as a going concern” as the movie theater giant struggles with the economic fallout from the pandemic. In a filing with the U.S. Securities and Exchange Commission, AMC said that it seems to have the cash to reopen its theaters this summer or later — but that the pandemic is an unexpected and unpredictable foe.
Many consumers are as yet reluctant to go back to crowded public settings amid the ongoing coronavirus crisis.