AMC to raise fresh capital, warns of liquidity troubles
Reuters
Published Oct 20, 2020 07:12AM ET
Updated Oct 20, 2020 08:55AM ET
(Reuters) - AMC Entertainment (NYSE:AMC) Holdings Inc, the world's largest theater chain, said on Tuesday it would issue shares to raise cash, but warned it may still not have enough liquidity to help it avoid restructuring its debt.
The company, whose shares fell nearly 8% in premarket trading, said it would sell up to 15 million of its Class A common stocks.
The move follows a grim evaluation by ratings agency S&P earlier this month, which said the company has six months of cash unless it raises more capital.
Big theater chains such as AMC, rival Cineworld Group and others have reopened many locations, but audiences have been thin due to virus fears and delays in major releases by studios. Small and mid-sized theater companies have said they may not survive the impact of the pandemic.
AMC said it expects revenue for the third quarter to be about $119.5 million, below market expectation of $155 million. The company had raked in $1.32 billion in the year-ago quarter.
Earlier this month, it had said more than 80% of its theaters in the United States would remain open, but the number of people visiting its cinemas has slumped 85% compared to last year.
Last week, Chief Executive Officer Adam Aron told Reuters it may need to raise additional capital either entirely or mostly through equity.
"In the event the Company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities," the company said in a filing on Tuesday. (https://
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.