AMC Entertainment Holdings Inc. (NYSE: AMC), the largest movie theatre company in the United States and globally, announced that since December 14, 2020, it has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital. This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter.
Of this $917 million in much-welcomed monies, AMC has raised $506 million of equity, from the issuance of 164.7 million new common shares, along with the previously announced securing of $100 million of additional first-lien debt and the concurrent issuance of 22 million new common shares to convert $100 million of second-lien debt into equity. In addition, the company has executed commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility. On this new European debt, AMC has the option of paying non-cash PIK interest throughout its duration. All amounts are prior to factoring in transaction costs, investment banking fees and original issue discounts.
Based on a variety of assumptions, including future attendance levels, AMC estimates that its financial runway has been extended deep into 2021. AMC also is presuming that it will continue to make progress in its ongoing dialogue with theatre landlords about the amounts and timing of owed theatre lease payments.
Given the push to vaccinate the general population, an increase in cinema attendance seems likely, although AMC notes that no one knows for sure the future course of this and other strains of the coronavirus, and therefore thoughts as to future cash needs of AMC are uncertain. Investors are cautioned accordingly.
Adam Aron, AMC CEO and president, said, "Today, the sun is shining on AMC. 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. This means that any talk of an imminent bankruptcy for AMC is completely off the table."
Aron added, "Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated. To that end, we are grateful to the world's medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program."
