(Bloomberg) — AMC Leisure Holdings Inc. mentioned it was now not liable to an imminent chapter submitting after assembling $917 million of recent financing, persevering with its struggle to fend off the consequences of Covid-19 on its theater enterprise.
The world’s largest cinema chain’s shares soared as a lot as 50% in premarket buying and selling and have been up 35% to $4.75 at 8:41 a.m. in New York. And AMC’s bonds have been among the many greatest gainers within the U.S. high-yield market on Monday. The second-lien notes rose as a lot as 12.75 cents on the greenback to a excessive of 52.25 cents, in keeping with Hint bond buying and selling information.
The Leawood, Kansas-based firm has raised $506 million of fairness, after securing $100 million of extra first-lien debt and changing $100 million of second-lien debt into fairness, it mentioned in a press release Monday. It additionally mentioned it executed dedication letters for $411 million of recent debt by way of mid-2023.
“Any speak of an imminent chapter for AMC is totally off the desk,” AMC Chief Govt Officer Adam Aron mentioned.
AMC’s deal already has backing from a mixture of debt and fairness issued in current months, in keeping with the assertion. With the brand new cash, AMC says it prolonged its monetary runway “deep” into 2021, a timeline wherein theater chains are ready for coronavirus vaccines to be extensively distributed and moviegoers to return for blockbuster releases.
AMC estimated it might maintain out by way of July within the absence of any improve in attendance, and assuming continued concessions from landlords, who have been owed $450 million as of Dec. 31, in keeping with a regulatory submitting. AMC mentioned it has stopped hire funds on “a considerable portion” of its leases and that it’s obtained default notices.
“Trying forward, for AMC to succeed over the medium time period, we’re going to want for a lot of most of the people within the U.S. and overseas to be vaccinated,” Aron mentioned within the assertion.
The corporate cautioned that even with a vaccine and improve in cinema attendance, the virus might worsen or different strains might seem, inflicting its use of money to stay unsure. Accordingly, AMC mentioned it’s potential extra sources of liquidity it might pursue sooner or later.
AMC mentioned on the finish of final 12 months that it wanted to boost at the very least $750 million to remain in enterprise. With out new cash, its present money would have been depleted as quickly as this month. The corporate has additionally been speaking with its landlords to amend phrases of sure leases and keep away from a possible money crunch.
The newest financing deal features a mortgage of 400 million kilos ($547 million) to its U.Okay. subsidiary Odeon Cinemas Group Ltd., which is able to refinance a 100 million-pound revolving facility and offers 300 million kilos of liquidity. The transaction is topic to the consent of Silver Lake Administration, majority holder of AMC’s convertible notes due 2026.
The $100 million in first-lien debt proceeds got here from a sale of payment-in-kind notes due 2026 to Mudrick Capital Administration on Jan. 15, AMC mentioned.
Theater chains have been exhausting hit by government-mandated shutdowns throughout the Covid-19 pandemic. Whereas some areas have been capable of reopen at restricted capability, many moviegoers have been reluctant to attend. The issue has been compounded by studios delaying main releases that drive ticket gross sales.
Within the submitting Monday, AMC mentioned fourth-quarter attendance fell about 92% within the U.S. and 89% internationally from the identical interval a 12 months in the past, and it was burning money at about $124 million a month.
(Updates with bonds in second paragraph, extra particulars from fifth paragraph.)
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