AMC to sell up to 43 million new shares, but cancels plans to seek approval of 500 million more

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Shares of AMC Entertainment Holdings Inc. fell in after-hours trading Tuesday after the theater chain unveiled plans to sell millions of new shares while revealing anticipated returns from reopened theaters, but said it would not ask. to shareholders who approved the possible sale of 500 million more. Share. In a filing with the Securities and Exchange Commission, AMC AMC, -0.35% said they expect to sell up to 43 million shares in a market offering. The company said it would use the proceeds for “general corporate purposes, which may include working capital, repayment, refinancing, redemption or repurchase of existing debt, capital expenditures and other investments.”

However, the company also revealed that the board decided not to ask shareholders for permission to sell up to an additional 500 million shares at its next annual shareholders meeting, a proposal that had caused some commotion among analysts and investors. Chief Executive Officer Adam Aron had said last week that if investors approved the plan, he would promise not to sell any of those shares in 2021; the 43 million shares to be sold were approved by shareholders years ago. AMC also disclosed preliminary financial results for the quarter ending March 31, as the network began reopening more rooms as COVID-19 restrictions eased. AMC said it expects to lose $ 567.2 million to $ 572.2 million in revenue of approximately $ 148.3 million. In the same quarter a year ago, when the COVID-19 pandemic began closing theaters worldwide, AMC reported a loss of more than $ 2 billion, primarily due to non-cash impairment charges from the revaluation of its properties, in sales of $ 941.5 million. Analysts expected, on average, AMC to lose $ 514.9 million on sales of $ 158.4 million in the first quarter, according to FactSet. AMC has raised more than $ 2 billion in stock sales, debt offerings and other measures since last fall as theater closings hit its finances. In the podcast appearance last week in which he promised not to sell any of the 500 million shares if investors approved that plan, Aron noted that the authorization to sell 43 million shares was still active, but said that “we have not yet made no decision. “For more information: AMC CEO agrees not to issue shares“ If we need to raise some cash in the short term, remember that we already have 43 million shares that are authorized in 2013 that we could use if we want to raise some cash. cash, if we decide it’s a good idea, “Aron said in an interview that AMC also revealed in a filing with the SEC.” We haven’t made any decisions yet. We are thinking about it, but we haven’t made any decisions yet. “AMC also disclosed in Tuesday’s presentation that as of March 31, 585 of its 590 theaters in the U.S. had reopened to a limited capacity of 15% to 60%, and 97 of the 354 international theaters that it leases or manages in association with others had reopened at 25% for 50% capacity. Shares fell between 1% and 2% in the extended session that followed Tuesday night’s disclosure. AMC’s shares have not suffered as much as its finances in the last few months, since it has They’ve been targeted by individual investors who have flocked to Reddit to collectively buy options and shares in scruffy stocks like video game retailer GameStop Corp. GME, + 5.23%, and old cell phone. the giants Nokia Corp. NOK, + 0.48% and BlackBerry Ltd. BB, + 2.20%. See also: Months after the GameStop saga, retailers have yet to verify that AMC shares have gained more than 300% in the last six months, as the S&P 500 SPX index, -0.02%, has risen by 23.5%. The company’s market capitalization was above $ 5 billion at Tuesday’s closing price of $ 11.46.