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.
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“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.”