AMC Entertainment Seeks to Raise $70 Million Amid Vaccine Hopes
AMC Entertainment Seeks to Raise $70 Million Amid Vaccine Hopes
(Bloomberg) -- AMC Entertainment Holdings Inc., the theater owner struggling to stay afloat during the Covid-19 crisis, is taking advantage of a recent jump in its shares to press ahead with the sale of about $70 million in new stock.
The company, based in Leawood, Kansas, said Tuesday that Goldman Sachs Group Inc. and B. Riley Financial Inc. will manage the 20-million-share offering. News of a potential vaccine Monday lifted the stock by more than 50%, opening the door to a bigger potential cash infusion.
A sale would add much-needed reserves to AMC’s cash balance, which stood at about $430 million at the end of the third quarter. Chief Executive Officer Adam Aron said this month the chain needs money to stay afloat until summer, when he expects Hollywood studios to release delayed 2020 films. A vaccine would reassure film fans that it’s safe to go back to theaters once again.
The company expects to burn through about $100 million a month in the fourth quarter, its chief financial officer said on a call with analysts. AMC initially filed for the offering on Nov. 2.
U.S. theater operators, led by AMC, had to close all of their locations in March because of the coronavirus pandemic. Most AMC locations are now open, though mainly only on the weekends.
AMC bonds were among the top gainers in the U.S. high-yield market this week, according to Trace bond trading data. Its 10.5% notes due 2025 were up nearly 4 cents on the dollar to around 72 cents Tuesday.
Shares of AMC fell as much as 3.1% in extended trading after the filing. The stock closed Tuesday at $3.51, up from a recent low of $2.11 earlier this month.
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