AMC Entertainment Holdings Inc. said over the weekend it has reached an agreement to settle a court fight with shareholders concerning a proposed stock conversion.
"AMC has recently reached an agreement to settle a putative stockholder class action concerning the proposed conversion of AMC Preferred Equity Units into Common Stock and reverse stock split," AMC said on its Twitter account Saturday night.
In a bid to pay down its significant debt, AMC had proposed converting AMC Preferred Equity $(APE)$ units into common stock, alongside a 10-to-1 reverse stock split and the capacity to sell more shares. Shareholders approved the move in March, but a judge's order kept it from taking effect.
The settlement proposal still must be approved by a Delaware Chancery Court judge, with a hearing set for June 29-30 and a decision to be announced at a later date.
AMC and shareholders reached a settlement agreement in early April, but it was rejected by a judge.
In a filing dated May 4, AMC argued that if the latest settlement is not approved, "the company would be put at significant risk of failing to meet its financial obligations beyond 2023, which would likely result in a bankruptcy or financial restructuring and, in turn, the total loss of the investments of holders of both common stock and APEs."
AMC touts itself as the largest movie-theater company in the world, with about 950 theaters and 10,500 screens across the globe.
AMC shares $(AMC)$ have rallied 45% year to date, but are still down 30% over the past 12 months. APE shares , meanwhile, are down 48% in 2023, though up 11% over the past year.
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