AMC Appears to Challenge 25 Million Extra Shares After 2,300% Rally
(Bloomberg) — AMC Leisure Holdings Inc. is asking buyers to authorize an extra 25 million new shares, aiming to capitalize on a rally that has despatched the inventory of the ailing movie-theater chain up about 2,300% this yr.
The proposal introduced Thursday in a submitting will probably be put to a vote on the firm’s July 29 annual assembly. The fairness in the present day could be valued at $1.3 billion, although the corporate promised to not situation the brand new shares in 2021.
“To efficiently navigate the street forward, we search to assemble all the monetary instruments which may assist us,” Chief Govt Officer Adam Aron mentioned in a press release. “An necessary instrument for any firm is having shares accessible to situation.”
The request is probably unsurprising for a corporation that’s grow to be the king of meme shares, on the coronary heart of a frenzy of on-line merchants decide to pump up its valuation.
Nonetheless, it’s a serious retreat from a request earlier this yr to authorize 500 million new shares. That proposal was initially up for a vote in Might, however the annual assembly was postponed and the request withdrawn after it grew to become clear buyers would shoot it down.
Learn extra: AMC Takes Merchants on a Wild Experience, Pockets $587 Million
Aron mentioned in April the struggling firm may situation about 43 million new shares. With gross sales of recent inventory totaling greater than $800 million simply this week, AMC has now accomplished practically all of that authorization, based on the submitting.
In a YouTube interview Thursday, Aron mentioned proceeds from one other fairness sale, if permitted, could be used to cut back debt, assist the corporate negotiate with landlords who’re owed $400 million, and to chase acquisitions “laborious.”
”It’s our view that we’re strengthening the corporate,” he mentioned. “We’re not hurting the corporate.”
(Updates with CEO’s feedback from YouTube interview beginning in penultimate paragraph.)
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