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AMC said on Jan. 25 it raised $917 million since mid-December despite facing equity and debt issues.
“Today, the sun is shining on AMC. After securing more than $1 billion of cash between April and November of 2020, through equity and debt raises along with a modest amount of asset sales, we are proud to announce today that over the past six weeks AMC has raised an additional $917 million capital infusion to bolster and solidify our liquidity and financial position,” said CEO and President of AMC, Adam Aron.
“This means that any talk of an imminent bankruptcy for AMC is completely off the table.”
According to Reuters, AMC was able to curtail bankruptcy through a “debt restructuring deal” with several of its creditors as well as private equity firm Silver Lake, among other financial decisions. Silver Lake and other creditors converted AMC’s debt holdings to equity which would effectively reduce AMC’s debt.
“This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter,” the company said.
On Wednesday, AMC said it raised an additional $304.8 million by selling shares this week, after their stock rallied due to retail “traders” buying up shares, which forced hedge funds who had shorted to cover their positions, which further exacerbated the run up in price, triggering a short squeeze.
This is following the initial rally in the Gamestop stock, which was also a heavily shorted company. Retail “traders” allegedly congregated on the Reddit forum r/wallstreetbets and decided to attempt to trigger a short squeeze on stocks that were heavily shorted by hedge funds.
Aron also made note of his desire for people to get vaccinated.
“Looking ahead, for AMC to succeed over the medium term, we are going to need for much of the general public in the U.S. and abroad to be vaccinated,” Aron said.
“To that end, we are grateful to the world’s medical communities for their heroic efforts to thwart the COVID virus. Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”
When the pandemic hit, AMC had to temporarily shut down many of its locations due to state-imposed lockdowns and social distancing mandates, which undoubtedly hurt their revenue. In addition, the few AMC theaters that did remain open saw a drastic decline in attendance.
AMC said its “financial runway has been extended deep into 2021” following the recent volatile stock surge as well as debt-to-equity conversions from several of its creditors.