AMC Entertainment (NYSE: AMC), is accelerating its plan to refinance its debt, according to a report from The Wall Street Journal. The company plans to refinance the high-interest debt that it had accumulated throughout the pandemic. According to CEO Adam Aron, AMC is “in advanced talks with multiple parties” to follow through with the refinance, though a fall in its stock has not helped.
“The precipitous share price decline puts them in a more precarious position to refinance high-interest debt and extend maturity — a worse position than they were a month or two ago,” said Alicia Reese of Wedbush Securities.
The movie theater chain’s total debt is over USD5 Billion. However, Aron reiterated to investors that it does not have any maturities due until 2023. Nevertheless, shares fell more than 4% amid the news.
Refinancing plans come as the company’s popularity amongst meme investors came to a lull and as the stock market, in general, undergoes a dramatic correction. AMC’s stock value has plummeted over 40% within 2022, abolishing strong gains that had helped it prevent bankruptcy in 2021.
Amid the trading frenzy in early 2021, AMC was able to replenish its resources through stock sales. However, shareholders have already blocked it from issuing new equity in the company, twice. Due to this circumstance, AMC is not able to issue additional shares to help it pay down debt.