Cash-strapped AMC Entertainment Aug. 31 announced that it has signed a definitive agreement to sell nine theatre locations (67 screens) in the Baltic region (Latvia, Lithuania, and Estonia) for €65 million ($77 million).
The agreement calls for AMC to receive approximately half of the sale proceeds on signing and the balance upon closing in each country after antitrust resolution in the coming months.
The world’s largest exhibitor with about 1,000 screens is slowly trying to return to normal operations after shuttering all theaters in mid-March due to the coronavirus pandemic.
“This transaction marks yet [more] decisive action taken, on the heels of our capital raising in April and debt restructuring and capital raising in July, to bolster our liquidity and strengthen our balance sheet…that underscores the inherent value of our theatre portfolio and resilience of our business,” CEO Adam Aron said in a statement.
Aron said he remains “encouraged” by attendance levels at re-opened screens in Europe and in the U.S., where almost 300 theaters are currently open for business.
Indeed, Warner Bros.’ much-hyped Christopher Nolan movie Tenet generated $53 million in ticket sales Aug. 26-30 across 41 theatrical markets outside the U.S. and China. The film opens in the world’s largest two markets next weekend.
“Growing consumer confidence in our cleaning and safety protocols continues to generate increased attendance and food and beverage spend, and we look forward to offering a full slate of new and entertaining film product to further drive attendance over the remainder of 2020,” Aron said.
Media analyst Michael Pachter with Wedbush Securities in Los Angeles, said the sale could help AMC reduce its long-term debt load to $4.8 billion, compared with $5.1 billion in the most-recent fiscal quarter.
With its recent debt restructuring, AMC has significantly improved its debt position, while also reducing its cash outlay by [upwards of] $180 million in the next six to eight quarters,” Pachter wrote in a note. “Collectively, these moves have effectively positioned the company to survive through extended closures in its domestic markets.”