AMC Dodges Bankruptcy With $917 Million Capital Infusion

Struggling movie theater chain AMC Entertainment Holdings has dodged bankruptcy by raising $917 million in new equity and debt capital, a move it says should allow it to stay in business “deep into 2021.”

The largest theater chain in America, AMC has been battered by the pandemic, with attendance crushed by ongoing social distancing and quarantining measures.

“After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position,” AMC CEO Adam Aron said in a Monday (Jan. 25) press release. “This means that any talk of an imminent bankruptcy for AMC is completely off the table.”

AMC said it has been receiving new capital since mid-December. The company has raised $506 million through the issuance of 164.7 million new common shares, along with $100 million through a first-lien debt. AMC also converted $100 million of second-lien debt into equity through the issuance of 22 million new common shares.

The entertainment company said it has also executed commitment letters for $411 million in incremental debt capital, which will be in place through mid-2023, through the refinancing and expansion of its European revolving capital facility. AMC has the option of paying non-cash PIK interest on the new European debt, it said.

AMC said it also hopes to make progress in ongoing talks with its theater landlords over rent owed. The company admitted its survival depends on most of the general public getting vaccinated against COVID-19 and said it was encouraged by efforts being made by world governments and the Biden Administration for broad-based vaccination.

AMC, which operates 960 theaters and 10,700 screens worldwide, has been doggedly trying to make ends meet since the pandemic took hold last spring. In an effort to lure in customers amid social distancing, the company launched its Private Theatre Rental program, which allows small groups of people to rent a sanitized theater for their own private film screening for only $99. A beta testing of the program brought in 110,000 people, the company said.

“It’s unprecedented for AMC to receive 110,000 contacts in four weeks about a private theatre rental, based only on word of mouth and organic publicity, and we are excited about and appreciative of the interest this has sparked among AMC guests,” said AMC Chief Content Officer Elizabeth Frank.