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AMC Cinemas to sell $1.4 billion in ‘APE units’ to reduce debt – Media Play News

Eric Grunwedel

AMC Theatres, the world’s largest theater operator, on Sept. 26 announced plans to sell more than 425 million so-called “AMC preferred units (APE)” to investors as an alternative to common stock in an attempt to trim its $5.4 billion. debt burden. The move comes as rival Regal Cinemas filed for Chapter 11 bankruptcy protection as the movie theater business struggles to return to pre-pandemic levels in 2019.

AMC first introduced APE in August as a dividend gift to canny common stock shareholders who didn’t want CEO Adam Aron to issue millions of new shares that would have depressed the value of existing stock. AMC said the APEs provided the company with currency that could be used in the future, among other things, to further strengthen its balance sheet, including by paying off some of its debt and other liabilities.

AMC Theaters CEO Adam Aron

The market responded with a selloff in AMC (and APE), which fell more than 7% during midday trading on September 26.

Despite this, AMC said it would produce a maximum of 425 million APE units “from time to time”. The number of units sold will reflect the total number of APEs currently authorized, less the portion retained for equity awards under existing or future equity incentive plans, if approved by stockholders.

The plan is designed to provide significant flexibility for AMCs to achieve their fiscal goals over time.

In a note, Alicia Reese of Wedbush Securities in Portland, Ore., said Aron continues to negotiate well with shareholders.

“It was a good way to get around their investors, who weren’t going to let them issue more shares to raise more money,” Reese wrote.

https://www.mediaplaynews.com/amc-theatres-to-sell-ape-units-in-effort-to-reduce-debt/ AMC Cinemas to sell $1.4 billion in ‘APE units’ to reduce debt – Media Play News

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