The cinema chain is raising more cash on its faltering financial performance that fell short of analyst expectations. AMC has agreed to sell up to 15 million additional class A shares, with the proceeds being used for general corporate purposes, the company said in an SEC filing.
AMC siad, “In the event the company determines that these sources of liquidity will not be available to it or will not allow it to meet its obligations as they become due, it would likely seek an in-court or out-of-court restructuring of its liabilities, and in the event of a future liquidation or bankruptcy proceeding, holders of the company’s common stock would likely suffer a total loss of their investment,”
It added, “Assuming approximately $50 million of cash is raised from this offering, we estimate AMC will end October with roughly $400 million of cash, which should be sufficient to get the company into the middle of 2021,” Eric Handler, an analyst a MKM Partners, said in an investors note on Tuesday. In our view, the company remains in a precarious cash position with a burn rate of about $100 million/month. As a result, additional liquidity events, which could include more equity sales or asset sales, are highly likely,”
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