AMC hires Citigroup as underwriter for preferred shares
Reuters
Published Sep 26, 2022 10:01AM ET
(Reuters) - AMC Entertainment (NYSE:AMC) Holdings Inc said on Monday it had hired Citigroup (NYSE:C) as an underwriter to help it sell up to 425 million units of its preferred stock, APE.
The theater-chain, however, warned potential investors that investments in APE might involve "losing all or a substantial portion of your investment" given the recent fluctuation in prices of the preferred shares and the underlying shares of AMC Entertainment.
AMC stock and the preferred equity dropped about 4% each following the announcement.
The company also said Citigroup will receive 2.5% cut per unit sold for the first $250 million gross sales of APE units, and a 1.5% cut per unit sold for the subsequent $250 million gross sales. It may also sell APE units to Citigroup.
Monday's development comes after AMC Entertainment on Aug. 5 announced APE as a special dividend for shareholders and a means to raise capital in the future.
But, APE's value has nearly halved since it began trading on the New York Stock Exchange on Aug. 22, while AMC has itself slid to near two-month low, as investors worried about potential dilution of value due to the new security.
APE carries 1/100th fractional interest in a Series A common stock of AMC Entertainment.
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Written By: Reuters
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