AMC seizes on meme stock moves to cut $221 milllion of debt
Sign up now: Get ST's newsletters delivered to your inbox
AMC, much of whose debt trades at distressed prices, has been chipping away at its maturities through other swaps and buybacks.
PHOTO: EPA-EFE
NEW YORK – AMC Entertainment Holdings is taking advantage of its meme stock rally to reduce its debt, revisiting a playbook that helped it shore up liquidity in 2021.
The movie theater chain said in a regulatory filing that it reached a private deal to swap about US$164 million ($221 million) of its 10 per cent notes due 2026 for 23.3 million shares of newly issued stock. Based on the principal exchanged and accrued interest, the new stock had a value of US$7.33 per share. AMC shares closed on May 14 at US$6.85.
AMC, much of whose debt trades at distressed prices, has been chipping away at its maturities through other swaps and buybacks. It exchanged around US$200 million of the debt for shares last year.
The company has been struggling as movie ticket sales remain stubbornly below pre-pandemic levels. A group of lenders made a proposal to the company to help it push back its near-term debt maturities, Bloomberg previously reported, and the company said it’s working to extend those obligations.
The struggling firm’s shares have soared in recent days, echoing 2021’s retail trading frenzy. The 10 per cent bonds also saw a big boost, jumping nearly 10 US cents on May 14 to 85.7 US cents on the dollar.
AMC shares slumped around 8 per cent in pre-market trading after the latest deal was announced. BLOOMBERG
