AMC’s APE-conversion settlement could lead to ‘potentially massive’ $16 billion equity raise, says analyst

The stock conversion is part of AMC’s ongoing battle to eliminate debt.

AMC’s APE-conversion settlement paves the way for a huge equity raise that could bring in as much as $16 billion, according to B. Riley Securities analyst Eric Wold.

The settlement, which was revealed in a filing Monday, opens the way for AMC Entertainment Holdings Inc.’s AMC proposed conversion of AMC Preferred Equity units APE , or APEs, into common stock, alongside a 10-to-1 reverse stock split and the capacity to sell more shares. The move, which is part of the company’s ongoing battle to eliminate debt, had faced court proceedings.

Related: AMC stock plunges 22% after company agrees to settlement terms, opening up for APE conversion AMC’s stock plummeted 23.7% before market open Tuesday, while the APEs rose 16.9%. AMC shares ended Monday’s session up 2%, or 79.9% off its 52 week high, FactSet data show. The APEs ended Monday’s session up 0.7%.

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