People are walking outside the new AMC 34th Street 14 board, as the city continues phase 4 reopening following restrictions imposed to slow the spread of the coronavirus on September 4, 2020 in New York.
Noam Galai | Getty Images
The AMC movie chain hopes to raise $ 125 million in new capital to prevent bankruptcy by selling 50 million shares in a new round of financing, the company said Wednesday.
The world’s largest film chain raised $ 104 million earlier this month, after selling about $ 38 million in available stock. The company is trying to consolidate its balance sheet to withstand the prolonged economic recession, as the coronavirus pandemic passes into a second year and threatens the viability of the film industry.
Earlier this month, AMC received a $ 100 million investment from Mudrick Capital Management, but the moneyless film chain still needed at least $ 750 million in additional cash to fund cash requirements until 2021.
The company has reiterated in several SEC filings that bankruptcy is a possibility if the company cannot raise more funds.
‘We intend to use the net proceeds from the sale of the Class A common shares offered by this prospectus for general corporate purposes, which may include the repayment, refinancing, redemption or redemption of existing debt or capital stock, working capital, capital and other investments, “the company said in a statement Wednesday.
While the Covid-19 crisis hit theaters in March, perhaps no theater chain has been hit harder than AMC. The company went into a pandemic with nearly $ 5 billion in debt, which it accumulated by equipping its theaters with luxury seats and buying competitors such as Carmike and Odeon.
AMC has been focusing on fundraising for months. It has already renegotiated its debt to improve its balance sheet this year and is exploring several options for additional liquidity. It is also trying to find ways to increase its presence, even if the outbreak worsens in the US
Shares of the company fell about 6 percent in Wednesday afternoon trading and fell 70 percent in January.