AMC Entertainment Holdings, Inc. (NYSE: AMC) reported entry into binding agreements with n Ad Hoc Group that will aid AMC to restructure majority of AMC’s debt securities on a consensual basis. AMC has also reached an agreement to restructure USD 600 Million of convertible notes issued in 2018 to Silver Lake. Under the terms of the agreements with the AdHoc Group, AMC’s total debt may be reduced by USD 460 Million to USD 630 Million, depending on how many lenders enter into the deal that are not part of the Ad Hoc Group of AMC’s Senior Subordinated Noteholders.
AMC’s noteholders will also invest USD 200 Million in new AMC first lien notes. When the private debt exchange closes, Silver Lake has agreed to provide an additional USD 100 Million to AMC in cash in the form of incremental first lien financing.
Commenting on the agreements, AMC CEO and President Adam Aron said, “Today is an important day for AMC as we have reached agreements that strengthen AMC’s financial position over the long term. This is one of many steps we have taken since March as we navigate through these turbulent coronavirus times, including significantly reducing operating costs and capital expenditures, working with theatre landlords to abate and defer rents, raising $500 million of new public debt in April and developing new health and cleaning protocols with the best global experts to keep our theatres safe. Now today, AMC can add to that list that upon the closing of these consensual bond restructurings, we materially will reduce our debt load, increase our cash and extend our maturities. This proud company, celebrating AMC’s 100th anniversary this year, is looking forward to our second hundred years with enthusiasm.”
Aron added, “AMC will continue to take bold actions to strengthen the financial position of our company. As the largest theatre operator in the United States and globally, we also are eager for the day to come when we can re-open all of our theatres safely and cleanly, but only when it is wise to do so. As and when that day comes, we have every intention to delight moviegoers, as they again get to enjoy a few hours of thought-provoking entertainment and escape when they visit our theatres and see movies – in our big seats, with our big sound and on our big screens.”