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Cinema giant AMC Theatres said on Friday that it has completed a debt offering to raise $100 million from investment firm Mudrick Capital Management LP.
In a regulatory filing, it said the Dec. 10 deal will see purchased senior notes exchanged for common stock to shore up the company’s balance sheet as it faces a continuing cash burn to stay in business.
AMC, the world’s largest theater chain, in its filing reiterated that it needs around $750 million to keep its theaters open in the face of the COVID-19 crisis, including rising infection rates in the U.S. markets and major studios shifting tentpole titles online.
AMC’s latest risk language also warned of a possible domino effect from Warner Bros. shifting its entire 17-picture 2021 film slate to its HBO Max streaming service, premiering them day-and-date with their theatrical release.
“These challenges have been exacerbated by the announcement by Warner Bros. that its entire studio film slate for 2021 will move to simultaneous release, which may result in other studios adopting a similar strategy,” AMC said in the filing.
AMC previously warned that its “existing cash resources would be largely depleted by the end of 2020 or early 2021” if current trends persist. “In the absence of additional liquidity, the company anticipates that existing cash resources will be depleted during January 2021,” it said in updated language on Friday.
With theaters in major markets like New York City and California closed, AMC said it experienced a year-over-year decline of 92 percent in its U.S. theater attendance for the three months ending on Nov. 30.
In July, AMC completed a debt restructuring agreement with its bondholders that included $200 million in fresh cash and the Silver Lake Group purchasing $100 million in new senior notes.
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