AMC Entertainment is once again on the lookout for a cash infusion in hopes of surviving the pandemic. The company, which was already having a rough time pre-Covid, has seen their profits slashed by lockdowns, and has been making various financial restructurings to keep from going bankrupt. In a recent SEC filing the company admitted that it was looking to sell, over the course of some time period, up to 200 million shares of its common stock. At the current price of $4.17 per share, that would pull in about $834 million dollars of cash to take advantage of.
That doesn’t mean AMC has any big plans however, the corporation suggests that the money will be used for far more mundane purposes. This infusion will be used for important but boring bookkeeping work. AMC states the new cash will be used for “the repayment, refinancing, redemption or repurchase of existing indebtedness or capital stock, working capital, capital expenditures and other investments.” In layman’s terms: they have bills to pay and not enough money to pay them.
Earlier filings indicated that the company was at risk of exhausting its cash reserves if things didn’t turn around quickly. AMC wrote in one such filing: “Our ability to obtain additional liquidity, which if not realized or insufficient to generate the material amounts of additional liquidity that will be required until we are able to achieve more normalized levels of operating revenues, likely would result with us seeking an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment.” Again, a more basic summary would be: if the lockdowns don’t end soon, or the company doesn’t find more investment, a lot of people could lose a lot of money as AMC continues to sink in its own debt.
Hopefully that doesn’t end up being the case, and the company manages to recover from, or at least survive the pandemic mostly intact. While some are hoping that the current wave of vaccines provides relief from the virus by mid-year 2021, it’s by no means guaranteed. That means for the time being, companies like AMC will have to continue to cope with the uncertainty of the future in whatever ways they can, hoping for the best, but preparing for the worst.
Source: The Hollywood Reporter
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