AMC Entertainment Preferred surged nearly 30% while AMC Entertainment tumbled over 25% in premarket trading after it agreed to settlement terms relating to the shareholder litigation around a stock conversion.
Common stockholders of AMC Entertainment have reached a landmark agreement with the company that will provide them additional shares as part of a recapitalization that will afford AMC Entertainment access to the equity it asserts it needs to service its debt obligations as it continues its recovery from the pandemic.
The settlement, announced by lawyers representing the stockholder group, will grant holders of AMC Entertainment common stock one share of common stock for every 7.5 shares held following a reverse stock split carried out in connection with a planned conversion of preferred share units, called APEs, into common stock. Any fractional shares owed will be paid in cash.
