AMC Entertainment’s new APE securities — AMC Preferred Equity Units – began trading today late morning in a messy session for the big exhibitor, whose primary stock is down by almost 40%
Aron, when announcing the APES earlier this month, described them as a kind of special dividend, a gift to AMC stockholders. The company is issuing 517 million APEs today and the board has authorized issuance of up to one billion of the securities.
, confirmed it may file for Chapter 11 in the U.S. to restructure. It dropped a first bombshell last week when it announced plans to do something dramatic finding itself with untenably high debt and dwindling ticket sales as a glut of new wide releases has given way to a quiet late summer and early fall for tentpoles. Cineworld has about $9 billion in debt, a big chunk of that acquired when it bought Regal in 2018 for $3.6 billion.
“In our opinion, the balance sheets of AMC, CNK, and MCS [the other three] are well positioned to push through that weak slate and we do not see any reason for investors to be incrementally concerned. Furthermore, we see an attractive setup for the exhibitors heading into the stronger film slates of 4Q22 and 2023 given the positive attendance and per patron spending dynamics over the past 6-12 months,” said Eric Wold of B. Riley Securities in a note.
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