As AMC Files Revised Stock Conversion Plan, Shares Soar

(CTN News) – In the wake of AMC Entertainment Holdings (AMC) filing a revised stock conversion proposal on Monday morning, and in anticipation of Barbie and Oppenheimer deliveries over the weekend, the company’s shares skyrocketed over 27% Monday morning.
AMC reported that the two summer blockbusters helped it post its biggest attendance and box office weekend since the beginning of 2019.

The food and beverage sales for AMC on Saturday were the second-highest one-day total in the history of the theatre chain.

There was a decision on Friday by a Delaware judge that invalidated the company’s decision to convert AMC preferred equity shares into regular AMC shares in an effort to raise capital.

The company has also filed a revised proposal for the conversion of preferred equity shares in its bid to raise capital.

According to his Sunday letter to shareholders, CEO Adam Aron warned that raising fresh equity in the near term is crucial to the future growth of the company.

According to him, if it doesn’t happen, AMC risked running out of cash next year or the year after, or it could be unable to refinance and extend its debt satisfactorily in the coming years.

Aron said that following the losses incurred during the COVID-19 pandemic, his overarching goal has been to keep AMC from “financial ruin.”

In order to do that, he indicated the only way to do it is to bring in more revenue to the company.

With the strike by actors and writers possibly delaying the release of new films in 2024 and 2025, he stated that this is a critical time in the film industry.

It is worth noting that while a large majority of investors voted in favor of the stock conversion proposal in March, several thousand investors filed a lawsuit in order to block it in order to prevent further misunderstanding of AMC shares.

It was worked out between the parties that an agreement would be reached, but Vice Chancellor Morgan Zurn of the Delaware Chancery Court rejected it as not being acceptable.

According to Aron, the company and plaintiffs have entered into a modification of the legal release surrounding the settlement of the Delaware litigation in order to address the Court’s expressed concerns regarding the settlement.

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