AMC reportedly in advanced talks to refinance debt
A man is seen walking past AMC Georgetown 14 Theatres, Washington, DC, on June 3, 2021.
Mandel Ngan | AFP | Getty Images
AMC EntertainmentAccording to The Wall Street Journal, the company is moving quickly to implement its plans to repay its debt.
According to the publication, movie theater chain is in advanced refinancing talks with multiple interested partiesTo reduce its interest rate and extend its maturity by many years. Following comments by Adam Aron, CEO earlier in the month, this follows his declaration that one of his main goals for 2022 would be to improve the financial situation.
CNBC reached out to AMC representatives for clarification but they did not respond immediately.
AMC has a total debt of over $5 billion. However, Aron repeatedly informed investors that AMC does not have maturities due before 2023.
AMC shares dropped more than 4% Tuesday on news of debt refinancing. amid robust selling in the broader market.
AMC is trying to improve its balance sheet as AMC’s stock price has fallen more than 40% from the start of the year. This reverses major gains which helped AMC avoid bankruptcy in 2013. AMC’s stock was supported by investors following the stock closely via social media platforms, such as Reddit.
AMC became caught up in the meme-stock trading frenzy. AMC was able, in the early 2021s, to replenish its funds through stock sales, but failed twice to gain shareholder approval to issue additional equity. This is a problem because the company can’t issue any more shares to reduce its debt.