April 16, 2020
Coronavirus-challenged AMC Theatres April 16 said it plans to raise $500 million in private equity funds. The world’s largest theatrical chain has seen its 11,000 screens worldwide go dark since the pandemic forced businesses catering to large group gatherings to shutter.
With zero revenue coming in and weekly expenses topping $30 million, AMC furloughed 600 corporate jobs, including CEO Adam Aron. With its stock cratering and management telling landlords it wouldn’t rent, Wall Street began circling the wagons in anticipation of a Chapter 11 bankruptcy filing.
With about $300 million in cash reserves at the end of March, and exhibitors not high on anyone’s essential business list (except their own), the proposed funding should keep the wolves at bay for awhile.
“Due to significant actions taken by the company, we believe our current cash balance is sufficient to withstand a global suspension of operations until a partial reopening in July,” AMC said in a regulatory filing. “After giving effect to the proposed notes offering, we believe the company will have sufficient liquidity to withstand a global suspension of operations until a partial reopening ahead of Thanksgiving.”
The news sent AMC shares up 37% in after-hours trading.