MW AMC's stock climbs more than 8% on debt-restructuring deal
By James Rogers
AMC shares are up 8.5%, putting them on pace for their largest percent increase since July 8
AMC Entertainment Holdings Inc.'s stock climbed Monday after the company announced a debt restructuring to strengthen its balance sheet and prepare for an expected recovery in the movie-theater industry.
Shares of AMC $(AMC)$ are up 8.5% Monday, outpacing the S&P 500's SPX gain of 1.1%. The stock is set to snap a three-day losing streak and is on pace for its largest percentage increase since July 8, when it rose 8.32%.
The refinancing transactions extend the maturity of approximately $1.6 billion of the company's debt due in 2026 to 2029 and 2030, providing "significant incremental financial runway," AMC said in a statement. The company has also arranged for the potential repurchase of up to $800 million of additional existing senior secured term loans due in 2026 in exchange for new term loans due in 2029. Additionally, AMC has arranged for the potential issuance of up to an additional $50 million of exchangeable notes in order to repurchase additional outstanding debt due in 2025, 2026 and 2027.
Related: AMC stock climbs as 'Despicable Me 4' boosts movie-theater chain on busy July 4 weekend
AMC and its subsidiaries are also issuing approximately $414 million of exchangeable notes for cash, with proceeds used to repurchase approximately $414 million of second-lien notes.
AMC CEO Adam Aron described the debt restructuring as a "major milestone" for the company. "Thanks to the unwavering support and commitment from our lenders, we have successfully extended a substantial portion of our 2026 debt maturities to 2029 and 2030," he said in the statement. "This agreement represents an undeniably strong vote of confidence by our lenders in AMC's future and provides AMC with the necessary financial flexibility to capitalize on an expected strong industry recovery trajectory."
During the conference call to discuss the AMC's first-quarter results in May, Aron said that the movie-theater chain and original meme stock had about $4.5 billion in debt, with "huge maturities" coming in 2026.
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AMC recently enjoyed a busy July 4 weekend, boosted by Universal Pictures' and Illumination's "Despicable Me 4," which opened July 3. The chain has also reaped the benefits of Pixar's animated blockbuster "Inside Out 2."
"Inside Out 2," which opened June 14, quickly surpassed "Dune: Part Two" to become the highest-grossing film of 2024. The movie also hit a $1 billion worldwide box office 19 days after its release, setting a record for an animated film.
-James Rogers
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July 22, 2024 15:18 ET (19:18 GMT)
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