AMC Entertainment, the largest movie theater operator in the country, said it completed a planned sale of $350 million in stock and used some of the proceeds to pay down $62.3 million in debt.
The completion of the sale, which was launched Nov. 9. saw approximately 48 million shares sold at an average price of $7.29 per share, AMC said after the market closed Monday.
That was a small premium over recent trading prices. The stock closed Monday at $7.11, down about 82% since the start of the year. Shares slipped a fraction in morning trading Tuesday to $7.07.
One of the stocks that online traders gravitated toward during the pandemic “meme stock” craze, AMC remains popular with day traders but has come crashing down to earth, despite several quarters of strong results as audiences returned to theaters.
But coming off the blockbuster “Barbenheimer” summer, followed by the fall release of Taylor Swift’s “Eras Tour” movie, theaters are facing a slowdown of new releases in the coming months thanks to the lengthy WGA and SAG-AFTRA strikes.
AMC still has a heavy debt load. After the actions announced Monday, which included a buyback of $50 million of notes that would have come due in 2026 and a swap of roughly 1.6 million shares for another $12.3 million of notes due 2026. The company reported that it held $4.75 billion in long-term debt in its quarterly report filed Nov. 8.
AMC Chairman and CEO Adam Aron said in a statement the move “underscores our continued commitment to strengthen our balance sheet by bolstering liquidity and methodically reducing debt levels.”
“Thus far in 2023, AMC has raised $865 million of gross equity capital and lowered liabilities by approximately $440 million by reducing our corporate borrowings by approximately $350 million and repaying more than $90 million of Covid-19 related deferred rent liabilities,” the statement continued.
The capital raise followed a settlement in August with shareholders that enabled Aron to raise money. At the time, the pact was seen as enabling the chain to avoid possible bankruptcy.
“Through methodically fortifying our financial position as we progress along our recovery trajectory, we ensure our ability to manage through industry challenges, including the ongoing impact of the Hollywood strikes earlier this year, and position AMC to thrive in the future as we deliver value to our shareholders,” Aron said.