AMC Entertainment, corporate parent of AMC Theatres, June 1 announced it has entered into an agreement to raise $230.5 million of cash from the sale of 8.5 million shares of Class A Common stock to Mudrick Capital Management. The equity, which represents about 1.7% of AMC’s outstanding stock, was raised at a price of about $27.12 per share.
AMC said the cash proceeds from the sale would be used to acquire third-party theater leases and enhance the consumer appeal of existing theaters. In addition, AMC said it also intends to use the cash for “deleveraging” opportunities, or the reduction of debt.
“AMC is being presented with highly attractive theater acquisition opportunities,” CEO Adam Aron said in a statement. “We are in discussions with multiple landlords of superb theaters formerly operated by Arclight Cinemas and Pacific Theatres [in Los Angeles]. With our increased liquidity, an increasingly vaccinated population and the imminent release of blockbuster new movie titles, it is time for AMC to go on the offense again.”