AMC Theaters Selling $47.7 Million in Shares to Stay Afloat During Pandemic

AMC Theaters Selling $47.7 Million in Shares to Stay Afloat

AMC Entertainment Holdings, the financially struggling movie theater chain, will be raising $47.7 million cash to stay open and pay its bills, according to a filing with the SEC on Monday.

Shares of the AMC were down 3.4% to $2.28 in trading Monday morning. The company will report its quarterly earnings Monday afternoon. The filing, which seeks to sell 20 million shares at $2.39 per share, outlined the risks, which include “the impact of the COVID-19 virus on us, the motion picture exhibition industry and the economy in general, ongoing fallout from the COVID-19 pandemic” and “our ability to obtain additional liquidity and our ability to continue as a going concern.”

AMC recently warned on October 20th that it may need to file for Chapter 11 bankruptcy if it is unable to obtain additional sources of money with which to pay its bills. The company made the disclosure as part of a separate agreement with Citigroup and Goldman Sachs to sell up to 15 million of its class A shares. In September, AMC raised $54 million through a similar agreement with Citigroup and Goldman.

On October 2nd, the credit rating agency Standard and Poor‘s warned that AMC was in danger of defaulting on its debts because of the ongoing pandemic, which has made it incredibly difficult for the company to fill seats. S&P downgraded AMC’s credit rating from CCC+ to CCC-, which moved it into the junk bond category. Major film studios have been pushing back big releases in the United States after a disappointing box office from Christopher Nolan’s Tenet, which only made $54 million in its nine weeks amid audience fears of attending and contracting COVID-19.

Theaters in New York, Los Angeles, San Francisco, and other large cities remain closed or operating at minimal capacity due to the pandemic, making it nearly impossible for theater chains to profit from their largest U.S. markets. The biggest studio tentpoles such as MGM‘s No Time to Die, Disney Pixar‘s Soul, and Warner Bros.‘s Wonder Woman: 1984 have also been repeatedly delayed with no guaranteed premiere date, putting the major theater chains like AMC in serious financial danger with no end in sight.

Leave your thoughts on AMC’s share sell off below in the comments section. Readers seeking to support this type of content can visit our Patreon Page and become one of FilmBook’s patrons. Readers seeking more movie news can visit our Movie News Page, our Movie News Facebook Page, and our Movie News Twitter Page. Want up-to-the-minute notification? FilmBook staff members publish articles by Email, Twitter, Instagram, Tumblr, Pinterest, and Flipboard. This movie news was brought to our attention by Variety.