Shares of AMC Entertainment (AMC) – Get Report fell on Wednesday after the world’s largest movie theater chain filed with the SEC to offer as many as 50 million shares, as it seeks to avoid bankruptcy.
The latest filing comes on top of 200 million shares it filed for earlier in the month.
The risks AMC noted include “our ability to obtain additional liquidity, which if not realized or insufficient to generate the material amounts of additional liquidity that will be required until we are able to achieve more normalized levels of operating revenues, likely would result with us seeking an in-court or out-of-court restructuring of our liabilities.
AMC has said it needs $750 million.
“And in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment,” it said in the filing.
AMC recently traded at $2.16, down 5.7%. The stock has plunged 70% year to date, as the covid pandemic shut theaters for months and movie viewers are still reluctant to frequent public theaters.
The New York Post had reported that Cinemark indicated an interest in operating some of AMC’s theaters should the company default on its obligations.
But a Cinemark spokesperson told Barron’s that the company “has not engaged in any discussions with AMC or any representatives regarding M&A activity, and there is no merit to the report.”