AMC is searching for a inventory sale to boost $ 50 million to avert chapter
A person wears a protective face in front of 14 AMC 34th Street movie theater as the city resumes Phase 4 reopening after restrictions were imposed in New York City on July 31, 2020 to slow the spread of the coronavirus.
Noam Galai | Getty Images Entertainment | Getty Images
According to an SEC filing released on Monday, AMC plans to sell up to 20 million Class A shares to raise nearly $ 50 million in new capital.
The company's shares – the world's largest cinema chain – fell nearly 7% in the early trading day. The company will report quarterly results on Monday afternoon.
The submission is just AMC's most recent donation attempt. Like others in the industry, the company has been hit by the coronavirus pandemic. First, hundreds of theaters had to close, and when they reopened, customers stayed at home and big Hollywood blockbusters delayed their opening.
Last month, AMC warned investors that its dwindling stacks of cash could cause them to file for bankruptcy.
On the road to the pandemic, AMC already had $ 4.75 billion in debt resulting from furnishing its theaters with luxury seating and buying from competitors such as Carmike and Odeon.
The cinema chain has been concentrating on fundraising for months. The company has already renegotiated its debt in order to improve its balance sheet this year and has been exploring various ways to increase its liquidity.
With a maximum offer price of $ 2.39 each, the sale of 20 million shares would raise $ 47.7 million for AMC.
The company has to wait long enough for new content to hit theaters. The next big feature is The Croods: A New Age, which is slated for Thanksgiving. Theatrical chains are hoping Free Guy and Wonder Woman 1984 keep their December release plans on track. Without these new films, moviegoers won't stray from their couches.
AMC and other theaters have been bleeding money to stay afloat. Last month, AMC released a preliminary earnings report that said the company had sales of approximately $ 119.5 million for the three-month period ended September 30. This is a sharp drop from AMC's $ 1.32 billion profit for the same period last year.
For the first nine months of 2020, AMC had sales of $ 1.08 billion, a fraction of $ 4.02 billion the previous year.