People walk outside the newly constructed AMC 34th Street 14th movie theater as the city continues Phase 4 of reopening after restrictions imposed to slow the spread of the coronavirus on September 4, 2020 in New York City.
Naoum Gallai | Getty Images
The company said on Wednesday that the cinema chain AMC hopes to raise $ 125 million in new capital to stave off bankruptcy by selling 50 million shares in a new financing round.
The world’s largest movie chain raised $ 104 million earlier this month after selling nearly 38 million of the 200 million available shares. The company is trying to shore up its balance sheet to withstand a prolonged economic downturn as the coronavirus pandemic enters a second year and threatens the film industry’s viability.
Earlier this month, AMC received a A $ 100 million investment from Mudrick Capital Management, But the cash-strapped movie theater chain still needs at least $ 750 million in additional cash to fund its cash requirements through 2021.
The company has repeated in several SEC filings that Bankruptcy is a possibility if the company cannot raise more funds.
“We intend to use the net proceeds from the sale of Class A ordinary shares provided by this prospectus for the general purposes of the company, which may include repayment, refinancing, redemption or repurchase of current debt, capital, working capital and capital expenditures,” the company said in Wednesday’s file.
While Covid-19 crisis Hitting theaters since March, perhaps no theater series has been more damaged than AMC. The company headed into the pandemic with nearly $ 5 billion in debt, which it raised by outfitting its theaters with plush seating and buying competitors like Carmike and Odeon.
AMC has focused on fundraising for several months. It has already renegotiated its debt to improve its balance sheet this year and it is Explore several additional liquidity options. It is also trying to discover ways to increase attendance even as the outbreak worsens across the United States
The company’s shares fell about 6% in midday Wednesday and have fallen 70% since January.