The World`s Largest Cinema chain AMC is selling up to 20 million class A shares to raise $50 million in new capital to escape bankruptcy. The cinema chain is struggling due to Coronavirus will report its earing on Monday afternoon. Last month the AMC warned its investors about bankruptcy due to its decreasing cash.
The AMC shares went down 7% on Monday in early trading before the announcement of its quarterly results. The company is trying to raise cash from the filing just like the other industries struggling in the pandemic.
The AMC had to close its hundreds of theaters due to pandemic and reopening of the theaters did not see any increase in customers due to delayed from Hollywood in releasing the movies. Also, people still preferring staying at home and watching movies online rather than going to cinemas.
AMC already had $4.75 billion in debt, before pandemic due to upgrading its theaters with new seating and with the new equipment. The company already negotiated its debt to improve its balance sheet and has been trying to increase cash flow for the last few months. By selling 20 million shares for $2.39 each, AMC can get $47.7 million.
The cinema industry including AMC hopes are high on few upcoming blockbusters nearthe Christmas and industry is expecting that upcoming movies “Free Guy” and“Wonder Woman 1984” will attract the moviegoers towards the theaters.
The AMC revenue declined to $119.5 million in the recently reported quarter from $1.32 billion in the same quarter last year, which is a massive decline. The AMC revenue for the first nine months remains $1.08 billion which was a fraction of the $4.02 billion a year earlier.