Shares of AMC Entertainment Holdings (AMC) - Get Report soared on Monday after the cinema-chain operator said it had raised $917 million in debt and equity that takes bankruptcy "completely off the table" and allows it to extend its "financial runway."
AMC was up 31.2% at $4.60 after the company said it has raised $506 million of equity by issuing 164.7 million new shares. That is combined with a previously announced $100 million of additional first-lien debt and the issuance of 22 million new common shares to convert $100 million of second-lien debt into equity.
AMC has additional commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of a European revolving credit facility, the company said. AMC may pay non-cash PIK (payment-in-kind) interest through the duration of the European debt.
"Based on a variety of assumptions, including future attendance levels, the company estimates that its financial runway has been extended deep into 2021," AMC said. "AMC also is presuming that it will continue to make progress in its ongoing dialogue with theatre landlords about the amounts and timing of owed theatre lease payments."
The coronavirus pandemic and subsequent shutdowns have put movie-theater operators in a dark space financially, not only due to sudden and massive losses in revenue but also due to the runoff effect of more people streaming content directly.
Shares of AMC plunged last month after it filed with the Securities and Exchange Commission to offer as many as 50 million shares in an effort to stave off bankruptcy. That filing came on top of 200 million shares it filed for earlier in the month.
However, AMC has repeatedly raised capital throughout the pandemic to bolster its liquidity and stay afloat - something CEO Adam Aron on Monday said means talk of imminent bankruptcy "is completely off the table."
AMC stock is still down some 48% over the past 12 months. By contrast, the S&P 500 has gained 16.6%.