Why AMC Is Hoping That Most Americans Get the Vaccine
For AMC Entertainment Holdings Inc., any talk of an “imminent bankruptcy is completely off the table.”
That’s according to Adam Aron, the CEO and president of AMC, the largest movie theater company in the U.S., after announcing that AMC has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital. The Leawood, Kan.-based company has been rocked by the pandemic, but said the increased liquidity should allow it to make it through “this dark coronavirus-impacted winter.”
Of $917 million, AMC said it has raised $506 million of equity from the issuance of 164.7 million new common shares, along with the previously announced securing of $100 million of additional first-lien debt and the concurrent issuance of 22 million new common shares to convert $100 million of second-lien debt into equity. In addition, the company has executed commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility.
Based on a variety of assumptions, including future attendance levels, AMC estimates that its financial runway has been extended deep into 2021. The company is also presuming it will continue to make progress in its ongoing dialogue with theatre landlords about the amounts and timing of owed theatre lease payments.
Given the push to vaccinate the general population, an increase in cinema attendance seems likely, according to AMC, although the company said that “no one knows for sure the future course of this and other strains of the coronavirus.”
“Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated,” Aron said. “To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”