Top cinema tour AMC Entertainment said it raised $ 428 million in new capital through the sale of 43 million shares at an average price of $ 9.94.
The company announced the results of the sale, which followed a plan presented in an SEC filing on April 27. In April, the company announced the plan to sell shares in the market and said it was abandoning plans to increase the number of shares by 500 million from the total number of shares allowed.
The capital increase “will immediately strengthen and fortify our liquidity profile,” said CEO Adam Aron, and “puts AMC in a stronger position to meet the challenges and take advantage of the opportunities that lie ahead.”
The reversal prevented a major stock market overhang, which investors greeted enthusiastically. Shares were up 16% at midday, to around $ 12.
AMC has managed to survive after being on the verge of bankruptcy on several occasions. Its entire circuit was closed for months due to the coronavirus pandemic, and was only reopened in major markets like New York and Los Angeles for a month or two. The company’s debt levels remain high and there are a lot of skeptics out there, especially after its stock has taken a wild ride with the stock of GameStop and other stocks even.
Aron has repeatedly praised the optimism of retail investors towards the company, describing it as validation of the company’s efforts to remain solvent.
When the company announced its quarterly results last week, Aron cited Winston Churchill (a favorite inspiration) to detail his strategy to Wall Street analysts. He quoted Churchill’s line on World War II: “This is not the end. It’s not even the beginning of the end. But maybe this is the end of the beginning. Aron added: “Sir Winston has won his titanic fight. I believe that AMC will also win our war. “