AMC Theatres Boosts Liquidity, Saying It Has "Financial Runway Deep Into 2021"

AMC Theatres CEO Adam Aron
Amy Sussman/FilmMagic

AMC Theatres CEO Adam Aron

"Any talk of an imminent bankruptcy for AMC is completely off the table," says CEO Adam Aron, with the firm adding the new financing will allow it to "make it through this dark coronavirus-impacted winter."

Cinema giant AMC Theatres has unveiled a new European financing deal, raising more than $400 million to help the company through a difficult period with additional liquidity amid the continuing coronavirus pandemic.

"This means that any talk of an imminent bankruptcy for AMC is completely off the table," said president and CEO Adam Aron. "Today, the sun is shining on AMC." The company estimated "that its financial runway has been extended deep into 2021."

Overall, the company said it "has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital," adding: "This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter."

It also said that it "also is presuming that it will continue to make progress in its ongoing dialogue with theater landlords about the amounts and timing of owed theatre lease payments."

Given the push to vaccinate the general population, "an increase in cinema attendance seems likely," AMC said, but noted "that no one knows for sure the future course of this and other strains of the coronavirus." Therefore its future cash needs remain "uncertain," it concluded.

A key part of the new funding is a European credit line. "The company has executed commitment letters for $411 million of incremental debt capital in place through mid-2023, unless repaid before then, through the upsizing and refinancing of its European revolving credit facility," the firm said on Monday, adding it has now raised $917 million since mid-December.

Reports had previously said that AMC was in talks for its U.K. unit Odeon to borrow money from such financial institutions as Apollo and others, with the deal backed by the firm's European assets.

Aron told CNBC earlier this month that AMC has managed to raise just over $200 million of the $750 million it was targeting since it projected it needs that much to fund its capital requirements through the end of 2021. "We need to raise more, but we’re working hard to do that, and we’ve laid out a plan and a blueprint to get there," Aron said.

In December, AMC said: "In the absence of additional liquidity, the company anticipates that existing cash resources will be depleted during January 2021."

In a Dec. 11 regulatory filing, the company also highlighted 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. Pandemic 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," that filing said.