AMC’s New Year’s Resolution: Trim Sky-High Rescue Debt Expenses
(Bloomberg) -- AMC Entertainment Holdings Inc. Chief Executive Officer Adam Aron made his New Year’s resolution public Monday: he’d like to see the movie theater chain cut burdensome interest costs his company racked up during its dramatic pandemic rescue.
“In 2020 and early 2021, AMC took on debt at high interest rates to survive,” Aron tweeted Monday. “I’d like to refinance some of our debt to reduce our interest expense, push out some debt maturities by several years and loosen covenants.”
AMC paid more than $320 million in interest on its borrowings in the nine months through Sept. 30, according to company regulatory filings, up from about $219 million in the same period in 2019.
Like other companies hit hard by Covid, the theater operator nabbed several rounds of emergency financing to help stave off bankruptcy after the pandemic took hold in the U.S. The company later caught the attention of fanatical equity bulls on Twitter and Reddit, who sent the stock surging to closing levels as high as $62.55 last year.
Aron didn’t elaborate on how AMC would look to refinance its debt, tweeting only that “There is no guarantee of success, but we will try very hard to get this done. We are always thinking of creative ways to make AMC’s future more secure.”
The company’s 10% bond due 2026 was among the most actively traded in the U.S. high-yield market on Monday. It rose around half a cent to 99.5 cents on the dollar at 10:18 a.m. in New York, according to Trace. The company’s shares jumped as much as 3.3% to $28.10.
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