Embattled cinema chain AMC Entertainment Holdings is raising $47.7 million in cash to stay open, according to a Securities and Exchange Commission filing published Monday.
Shares of the company were down 8.5% to $2.15 in trading Monday. The company was set to report quarterly earnings Monday afternoon.
The S3 filing, which seeks to sell 20 million shares at a price of $2.39 per share, said the risks include “the impact of the COVID-19 virus on us, the motion picture exhibition industry and the economy in general, ongoing fallout from the COVID-19 pandemic” and “our ability to obtain additional liquidity and our ability to continue as a going concern.”
The beleaguered chain warned on Oct. 20 that it may have to file for Chapter 11 bankruptcy if it cannot obtain additional sources of liquidity. The company made that disclosure as part of a separate equity distribution agreement with Citigroup Global Markets and Goldman Sachs to sell up to 15 million class A shares. AMC raised $54 million in September through a similar agreement with Citigroup and Goldman Sachs.
On Oct. 2, credit rating agency S&P warned that the AMC was in danger of defaulting on its debt due to the ongoing COVID-19 pandemic. S&P downgraded the company’s credit rating from CCC+ to CCC-, moving into the junk bond category, and cited the ongoing struggles in the exhibition industry. Major studios have been delaying high-profile releases in North America in the wake of a downbeat performance by Christopher Nolan’s “Tenet” — which has taken in only $54 million in nine weeks amid reluctance by many moviegoers to attend.
AMC is the largest chain in the U.S. with 659 locations. It began reopening locations in August after shuttering them in March as the pandemic took hold.
During the past weekend, the Focus Features-Amblin horror movie “Come Play,” debuted with only just $3.15 million from 2,183 screens, enough to lead the sleepy domestic box office chart. New York City, Los Angeles and San Francisco remain closed due to the health crisis, and many reopened exhibitors are limiting hours.