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Shares of AMC Entertainment Holdings Inc (NYSE: AMC) opened down around 25% this morning after the cinema chain revealed plans to raise new shares.
Antara Capital to buy its APE units
On Thursday, the Lewood-headquartered company said it planned its sale “APE” Units at a price of 66 cents (weighted average) to one of its existing debt holders – Antara Capital LP. The Press release Also added:
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Antara will also replace $100 million in principal amount 2n.d Lien Notes due 2026 for approximately 91 million APE units, thereby reducing AMC’s outstanding debt by $100 million.
This will reduce its annual interest expense by about $10 million.
Initially, Antara will buy 60 million of its APE units – the rest will be exercised later. Against the start of 2022, AMC shares Now down about 85%.
AMC cuts stake in proposed reverse split
On Thursday, its board of directors proposed a 1-for-10 reverse stock split. AMC intends to convert its APE units into common shares, which will further dilute its existing shareholders.
The movie theater company is yet to receive approval from its investors for these proposals, which are also subject to other customary closing conditions. According to CEO Adam Aron:
Our cash flow is now significantly improved and the balance sheet is strengthened. We look forward to growing box office growth in 2023 and beyond, and AMC continuing to benefit from its unique leadership position in the film industry.
Last month, AMC Entertainment Holdings Inc reported A better-than-expected third quarter, however, failed to meaningfully benefit AMC shares.
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