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AMC Theatres announced its latest effort Tuesday to raise capital as the struggling cinema chain looks to stay afloat as movie theatres across the globe continue to be slammed by the coronavirus pandemic.
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According to an SEC filing, AMC has entered into a equity distribution agreement with Citigroup Global Markets and Goldman Sachs to sell up to 15 million class A shares intended for "general corporate purposes." AMC previously raised around $54.7 million through the sale of another 15 million shares as part of a similar at-the-market offering program completed in September.
The announcement comes as the company says its existing cash resources would be "largely depleted" by the end of 2020 or early 2021. According to AMC, the company's estimated cash and cash equivalents as of Sept. 30 is roughly $417.9 million.
AMC RENTING OUT THEATERS FOR $99 AMID PANDEMIC RECOVERY PLANS
While AMC is looking into additional debt and equity financing, further renegotiations with landlords regarding its lease payments, potential asset sales, joint-venture or other arrangements with existing partners, and minority investments in capital stock, the company warned investors that it could potentially file for bankruptcy as a last resort.
"In the event the company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities," the company said. "In the event of a future liquidation or bankruptcy proceeding, holders of the company’s common stock would likely suffer a total loss of their investment."
The company added that given the difficulty in estimating its liquidity requirements and daily cash burn rate, it will likely need "significant amounts of additional liquidity" and that there is "substantial doubt" about its ability to continue for a reasonable period of time.