As Movie Theater Closures Continue, AMC Entertainment Plans $ 47.7 Million Share Sale – Deadline

AMC Entertainment plans to sell 20 million of its Class A shares, for $ 47.7 million, as it faces the ongoing closures of many of its theaters and the removal of studio films from the release schedule 2020.

COVID-19 hampered Tenet’s August release, and aside from cheaper and targeted titles, large releases moved to later release dates or streaming debuts.

The company disclosed the decision in a document filed with the SEC on Monday. Among the risk factors for investors listed by AMC in the filing is “our ability to obtain additional liquidity and our ability to continue to operate”.

Three weeks ago, exhibitor n ° 1 disclosed that its liquidity could run out by the end of the year, sparking a new wave of anxiety that it could end up bankrupt. While key markets like San Francisco have come back online, New York – where AMC is the dominant commercial player – remains banned, with no idea when state health officials might change their tone. Areas of New York outside the city reopened their theaters last month. Los Angeles is also unplugged for the time being.

The fate of the great exposure channels (and cinema itself) has been a major scenario in the entertainment industry during the coronavirus pandemic. It is not yet clear who could be a candidate to come to the rescue of cinemas. Movie studios have more flexibility to potentially invest in theaters now that the Paramount Executive Order of 1948 has been rescinded, but executives have recently poured cold water on this scenario.

Likewise, tech companies like Netflix or Amazon don’t seem to have financial constraints, but have countered speculation that they might go out and buy theaters. Netflix has made deals to operate the Egyptian Theater in Los Angeles in partnership with the American Film Library and also to manage the Parisian Theater in New York, but executives called the two movements one-off opportunities.

Private equity firms are a likely source of equity capital for theaters. Silver Lake already owns 31% of AMC and strengthened its position with an injection of $ 600 million in 2018.

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