AMC Entertainment has completed the restructuring of $2.6 billion in debt. The theater chain announced on Monday that more than 87 percent of Senior Subordinated Notes holders participated in the deal that also resulted in AMC's debt load being reduced by $553 million with between $355 and $415 million in cash and other liquidity improvements coming over the next 12 to 18 months.
"This consensual restructuring of our debt and enhancement of our liquidity are extraordinarily important transactions for AMC," AMC CEO and President Adam Aron said in a statement. "We have substantially increased our cash reserves and improved our liquidity in other ways to extend our financial runway into 2021. This will greatly help AMC, a proud 100-year-old company, to get through this period of unprecedented theatre closures caused by the coronavirus. In addition, the debt exchange reduces our debt by more than $550 million and extends our debt maturities to 2026. Now we can focus solely on the all-important task of opening our theatres in the U.S., Europe and the Middle East safely and responsibly, allowing us once again to welcome moviegoers back to our big screens at AMC. As it is said when things get going in the world of movies: lights, camera, action!"
The completion of the debt restructuring comes several weeks after it was announced in early July and may ease bankruptcy concerns for some investors as the company has been hard-hit by the coronavirus pandemic with theaters having been closed since March. Since those closures, AMC has essentially been operating without any revenue and while AMC currently plans to reopen theaters sometime in mid to late August, it's a situation that could very much be in flux as COVID-19 cases continue to spike across the country.
When theaters do reopen, there will be some changes in the previous status quo of things as well. Not only will there be health and safety measures for moviegoers such as a requirement to wear masks, but the actual exhibition of movies will see some changes as well. AMC recently came to an agreement with Universal that will see AMC Theatres require Universal to have a 17-day exclusive on theatrical releases before the studio can send them to VOD. The previous standard has been a 90-day period of theater exclusivity before home media release.
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