People stroll exterior the newly boarded AMC 34th Street 14 movie show as town continues Phase Four of re-opening following restrictions imposed to gradual the unfold of coronavirus on September 4, 2020 in New York City.
Noam Galai | Getty Images
Movie theater chain AMC is hoping to raise $125 million in fresh capital to stave off bankruptcy by promoting 50 million shares in a brand new funding round, the corporate stated Wednesday.
The largest cinema chain in the world raised $104 million earlier this month after promoting roughly 38 million of 200 million in accessible shares. The firm is attempting to shore up its steadiness sheet to face up to the extended financial downturn as the coronavirus pandemic drags right into a second yr and threatens the viability of the film trade.
Earlier this month, AMC acquired a $100 million funding from Mudrick Capital Management, however the cash-strapped cinema chain nonetheless wanted no less than $750 million of extra liquidity to fund money necessities via 2021.
The firm has reiterated in a number of SEC filings that bankruptcy is a risk if the corporate cannot raise extra funds.
“We intend to use the net proceeds from the sale of the Class A common stock offered by this prospectus for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or capital stock, working capital, capital expenditures and other investments,” the corporate stated in the Wednesday submitting.
While the Covid-19 disaster has battered theaters since March, maybe no theater chain has been hit tougher than AMC. The firm headed into the pandemic with practically $5 billion in debt, which it had amassed by outfitting its theaters with luxurious seating and from shopping for opponents such as Carmike and Odeon.
AMC has been targeted on fundraising for months. It already renegotiated its debt to enhance its steadiness sheet this yr and is exploring a number of choices for extra liquidity. It can be attempting to determine methods to improve attendance even as the outbreak worsens throughout the U.S.
Shares of the corporate have been down by round 6% in noon buying and selling Wednesday and have slumped by 70% since January.