The Covid-19 pandemic has landed AMC Entertainment in some deep water. The theater chain has been hit hard by the lack of business and having to shut down its locations during lockdowns. Now, AMC has filed with the SEC to sell up to 200 million shares as a way to liquefy some assets into cash.
At an estimated price of $4.22 per share, AMC could potentially raise $844 million by selling off 200 shares. However, the stock price has been in a falling trend and that number could change.
Earlier this summer, AMC raised close to $40 million by selling shares and announced a major debt restructuring plan as well, but so far it hasn’t been enough to solve all the theater chain’s financial problems. The theater chain said it fully expects to run out of cash by the end of this year.
AMC said it “believes its cash burn to date is in line with the Prior Update. However, given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material.”
AMC has also tried to bridge the revenue gap by renting out its theaters for private viewing parties. You can book an entire theater room for you and up to 20 guests so you don’t have to worry about getting germs from strangers. Reservations for one of their “AMC Safe & Clean” auditoriums start at just $99. Social distancing and masks are still required unless actively eating or drinking.