AMC shares soar more than 30%
Shares of AMC Entertainment (AMC) soared more than 30% during Tuesday’s session after announcing a secured debt deal to give the struggling theater company a liquidity boost.
Through an SEC filing, AMC announced the issue of $100 million in debt with an interest rate of 15%. The company has until July to make good on its first interest payment. It also has the option to "pay in kind" through the issuance of additional bonds with an interest rate of 17%.
The move gives AMC much needed capital to continue operating. The theater company announced last year it was fighting off bankruptcy.
Theater companies have been some of the hardest hit during the pandemic as they were forced to close temporarily. Even though they began reopening venues with added safety measures last year, reluctance from movie-goers and an industry shift from movie studios debuting their hits on streaming services has impacted the theaters’ recovery.
Back in October, AMC warned through an SEC filing that given the reduced movie slate for the fourth quarter, “The Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021.” That announcement sent shares spiraling downward.
The company has been able to raise capital through the issue of new shares and debt deals. Over the last 12 months AMC stock is down 58%.
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre
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