Movie theater chain AMC Entertainment Holdings needs a cash infusion of at least $750 million, otherwise it might have to file for bankruptcy.
AMC said in a filing on Friday that without additional financing, the company will run out of cash by next month, Bloomberg News reported. In order to raise funds, the company is planning to sell more shares and possibly get financing from European sources. It is also making deals with its debt holders, including Mudrick Capital Management.
The company wants to avoid bankruptcy since that would wipe out current stockholders’ positions.
The company had about $320 million in cash on hand as of November, down from $418 million in September. AMC was spending an average of about $125 million per month in October and November.
The pandemic has pummeled AMC’s business: Attendance at the chain’s U.S. locations fell 92 percent in the fourth quarter from the same time period a year ago. The company closed some of its theaters, and in cities like New York and Los Angeles, those cinemas have not been able to reopen.
To help keep it afloat, the company signed a commitment letter with Mudrick Capital that would allow the investment firm to buy $100 million of new AMC-issued bonds. Mudrick would then receive a commitment fee equal to more than 8 million shares in the company.
AMC is also negotiating rent relief with its landlords, since it has over $400 million of deferred rent coming due in 2021, according to Bloomberg.
[Bloomberg] — Keith Larsen