AMC Reportedly Close to a Deal to Stave Off Bankruptcy

A report says AMC is close to a restructuring deal that will help the largest U.S. movie chain stave off a bankruptcy filing.
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Shares of AMC Entertainment Holdings  (AMC) - Get Report were rising in premarket trading Wednesday following a report that said the largest U.S. cinema chain was close to a restructuring deal that would help stave off a near-term bankruptcy filing.

The Wall Street Journal reported the proposed deal, which could be announced within days, would require bondholders to provide a $200 million senior loan and to swap their unsecured claims at a discount for new, second-lien debt.

AMC also would turn down a competing financing offer from senior lenders including Apollo Global Management APO, the Journal reported, citing people familiar with the matter.

AMC was forced to shut down its more than 1,000 worldwide theaters in March due to the coronavirus pandemic.

The company has pushed back plans to reopen most of its U.S. theaters until July 30, following date changes for the releases of two major films, the live-action remake of “Mulan” and science-fiction thriller “Tenet,” the Journal noted.

AMC previously had said it was set to reopen its more than 600 U.S. theaters by the middle of July, albeit with strict new protocols including 30% theater capacity limits, between-showing disinfecting and having AMC employees wear face masks while in theaters.

The coronavirus pandemic and subsequent shutdown has hit movie-theater operators like AMC particularly hard, not only due to sudden and massive losses in revenue but also due to the runoff effect of more people streaming content directly to their homes and devices, which in turn has raised questions over the viability of the entire theater industry.

The stock was rising 13.08% to $4.67 in premarket trading.