(Bloomberg) — AMC Leisure Holdings Inc. stated it was now not liable to an imminent chapter submitting after assembling $917 million of recent financing, persevering with its combat to fend off the consequences of Covid-19 on its theater enterprise.
The world’s largest cinema chain’s shares soared as a lot as 50% in premarket buying and selling and have been up 35% to $4.75 at 8:41 a.m. in New York. And AMC’s bonds have been among the many largest gainers within the U.S. high-yield market on Monday. The second-lien notes rose as a lot as 12.75 cents on the greenback to a excessive of 52.25 cents, based on Hint bond buying and selling information.
The Leawood, Kansas-based firm has raised $506 million of fairness, after securing $100 million of extra first-lien debt and changing $100 million of second-lien debt into fairness, it stated in a press release Monday. It additionally stated it executed dedication letters for $411 million of latest debt by way of mid-2023.
“Any discuss of an imminent chapter for AMC is totally off the desk,” AMC Chief Government Officer Adam Aron stated.
AMC’s deal already has backing from a mixture of debt and fairness issued in current months, based on the assertion. With the brand new cash, AMC says it prolonged its monetary runway “deep” into 2021, a timeline wherein theater chains are ready for coronavirus vaccines to be broadly distributed and moviegoers to return for blockbuster releases.
AMC estimated it might maintain out by way of July within the absence of any enhance in attendance, and assuming continued concessions from landlords, who have been owed $450 million as of Dec. 31, based on a regulatory submitting. AMC stated it has stopped hire funds on “a considerable portion” of its leases and that it’s acquired default notices.
“Trying forward, for AMC to succeed over the medium time period, we’re going to want for a lot of most people within the U.S. and overseas to be vaccinated,” Aron stated within the assertion.
The corporate cautioned that even with a vaccine and enhance in cinema attendance, the virus might worsen or different strains might seem, inflicting its use of money to stay unsure. Accordingly, AMC stated it’s taking a look at potential extra sources of liquidity it could pursue sooner or later.
Landlord Talks
AMC stated on the finish of final yr that it wanted to lift at the very least $750 million to remain in enterprise. With out new cash, its present money would have been depleted as quickly as this month. The corporate has additionally been speaking with its landlords to amend phrases of sure leases and keep away from a possible money crunch.
The most recent financing deal features a mortgage of 400 million kilos ($547 million) to its U.Okay. subsidiary Odeon Cinemas Group Ltd., which is able to refinance a 100 million-pound revolving facility and gives 300 million kilos of liquidity. The transaction is topic to the consent of Silver Lake Administration, majority holder of AMC’s convertible notes due 2026.
The $100 million in first-lien debt proceeds got here from a sale of payment-in-kind notes due 2026 to Mudrick Capital Administration on Jan. 15, AMC stated.
Theater chains have been arduous hit by government-mandated shutdowns through the Covid-19 pandemic. Whereas some areas have been capable of reopen at restricted capability, many moviegoers have been reluctant to attend. The issue has been compounded by studios delaying main releases that drive ticket gross sales.
Within the submitting Monday, AMC stated fourth-quarter attendance fell about 92% within the U.S. and 89% internationally from the identical interval a yr in the past, and it was burning money at about $124 million a month.
(Updates with bonds in second paragraph, extra particulars from fifth paragraph.)
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