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AMC discusses selling up to 500M additional shares

AMC Entertainment Holdings Inc. is considering using a possible equity issuance to reduce debt obligations or overdue rent. If given shareholder authorization to issue up to 500 million shares, AMC said it may use the proceeds from stock sales to buy back debt or use as a cash buffer.

AMC Entertainment Holdings Inc. is exploring using a possible equity issuance to pare debt obligations or overdue rent.

If shareholders authorize the issuance of up to 500 million additional shares, as AMC has proposed, the company would consider using proceeds from stock sales to buy back debt at a discount or issuing shares to landlords as compensation for deferred rent, CEO Adam Aron said in an interview with the Wall Street Journal.

AMC could also keep the proceeds as a cash buffer against a longer-than-expected recovery from COVID-19.

When AMC has recovered from the industrywide downturn, the company also would consider using shares or proceeds from stock sales to acquire other movie theater chains or related businesses, Aron said.

Leawood, Kan.-based AMC, the world’s largest movie theater chain with close to 1,000 locations, came close to running out of cash over the last year, and even created a contingency plan in case it had to file for bankruptcy.