Chinese company Wanda Group has given up its majority stake in AMC Theatres.
According to AMC Entertainment’s annual report, filed Friday with the Securities and Exchange Commission, the Beijing-based conglomerate had diminished its stake as of Dec. 31 to 23.08% of the company’s outstanding common stock and 47.37% of combined voting power of the common stock. Then on Feb. 1, Wanda Group converted all outstanding Class B common stock to Class A common stock, which brings its ownership to 9.8% as of March 3.
“Even after conversion, Wanda may have significant influence over our corporate management and affairs, due to their representation on the Board of Directors and their 9.8% stock ownership as of March 3, 2021, based on our records and information from Wanda,” the filing stated.
AMC Entertainment’s CEO Adam Aron addressed the dilution of Wanda’s ownership on Wednesday, during the company’s quarterly earnings call.
“We greatly value our association with Wanda. Wanda still has two AMC board seats, and I can genuinely tell you that they have been an absolute delight for me to deal with the past five years that I have led AMC,” Aron said. “However, with no controlling shareholder, AMC will be governed just as is most publicly traded companies with a wide array of shareholders.”
Wanda Group had owned a controlling stake in AMC since 2012. Silver Lake Partners, a private equity firm, made a $600 million investment in AMC in 2018, but Wanda still controlled the majority of AMC’s board of directors.
Amid the tumult of the coronavirus pandemic, AMC Entertainment reported a net loss of $4.6 billion in 2020. The theater chain, which has the largest footprint in the world, was forced to close its venues last spring and furlough or lay off thousands of employees. Some venues have slowly started to reopen, but attendance has been low in the U.S. given the lack of new movies and the general public’s apprehension to return to indoor spaces.