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AMC negotiated with “more than a dozen strategic investors” to raise capital in the war for survival



AMC CEO Adam Aron said during the company’s third-quarter earnings call on Monday that he is currently in talks with “more than a dozen strategic investors” to invest a stake in the movie theater chain.

Negotiations come as the company seeks to raise enough capital to survive at least until next summer, when they expect a COVID-1

9 vaccine and an expected release of around 44. Previous blockbuster movie was delayed by pandemic.

Aron notes that AMC is also talking with its existing lenders to “gauge their interest in taking more pride in our liquidity,” as they did in the summer. and has restarted a conversation with landlords to help reduce or delay rent payments. By the end of the third quarter, AMC had deferred rent payments of approximately $ 325 million with an average repayment period of 24 months.

AMC warns potential investors such as BOOKS INCREASED CASH THROUGH SELLING 15 MILLION SHARES

“It all really comes down to one thing: We believe we will need to raise more capital to extend the runway next summer,” Aron said. “The simple question becomes, can we raise the necessary capital?”

As of September 30, 2020, AMC has $ 418 million in cash, plus $ 11 million in limited cash. The company burned cash a total of $ 324 million in the quarter, mainly due to the costs associated with reopening its theater. Aron says the company has enough liquidity to last until the end of the year.

AMC warns potential investors such as BOOKS INCREASED CASH THROUGH SELLING 15 MILLION SHARES

Last month, the AMC warned investors that the possibility of bankruptcy was on the table as the spread of the virus continued to cause many of their cinemas globally to close.

As of the end of October 2020, AMC has operated approximately 539 out of 600 domestic locations and about 261 out of 358 international locations. However, Aron says open locations in the United States are fluctuating between 10% and 20%, far below the 25% required to generate cash.

Aron has compared the film industry’s fight against the pandemic with the UK’s war for survival during World War II.

“We will fight on seas and oceans, we will fight with increasing confidence and increasing power in the air, we will defend our Island, no matter what the price may be.” Aron cites the famous speech of former British Prime Minister Winston Churchill. “We’ll fight on the beach, we’ll fight on the landing zone, we’ll fight in the fields and in the streets. We’ll fight in the hills.”

Since March, the company has raised about $ 900 million from new debt and equity secured over $ 1 billion in concessions from creditors and homeowners and raised more than $ 80 million. la from the sale of property. Additionally, the company said earlier on Monday that it was looking to sell an additional $ 48 million in value shares.

“It is too early to know if these efforts will pay off or how much,” Aron added. “But our day and night are both busy at AMC and we absolutely don’t sit in our arms whining about bad hands. , the cards, for which the coronavirus has dealt with us. “

In addition to a greater investment effort to raise capital, AMC has reached an agreement with Universal Studios on six theatrical releases where it will partner with the studio to watch at home. Under the agreement, the movies will have a shortened theatrical release of about 17 days before they are made available to watch at home. AMC will then receive a portion of sales revenue for the video copies sold by Universal on-demand video.

“The AMC, as we demonstrated with the deal with Universal, was not stuck in 1955. We were ready to look at alternative models,” said Aron. “We understand the streaming world is based on us. We believe that will optimize our bottom line and that of the studio if they can have a mix of theatrical release and streaming. “

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AMC has a net loss of $ 905.8 million, or $ 8.41 per share, compared with $ 54.8 million a year ago. The company reported revenue of $ 119.5 million, down from nearly $ 1.32 billion a year ago.

Ticker Protect Final Change Change %
AMC AMC ENTERTAINMENT HOLDINGS INC 2.15 -0.21 -8.90%

AMC shares plummeted more than 8 percent in Monday’s trading. However, the announcement of negotiations with investors pushed the stock slightly in after-hours trading, with shares up about 3% on Monday evening.

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