AMC Entertainment Holdings Inc., the world’s largest cinema chain, agreed to sell as many as 15 million shares of its stock while warning investors that it may need to file for bankruptcy, leaving its equity worthless, Bloomberg News reported. AMC, contending with a liquidity crisis that threatens its ability to remain a going concern, said that the equity distribution plan might not be enough. With $417.9 million in cash on hand, the company still needs a material amount of new funding by the end of the year to stay in business, it said in a filing yesterday. If AMC is unable to raise enough cash to meet its obligations, the company said that it would file for bankruptcy or seek an out-of-court restructuring of its debts. In the event of a liquidation or bankruptcy, AMC’s shareholders would likely suffer a total loss of their investment, the company said. The company “remains in a precarious cash position with a burn rate of about $100 million per month,” Eric Handler, an analyst at MKM Partners, wrote in a note yesterday. AMC and other movie-theater owners have been trapped in a tough situation since the coronavirus pandemic forced auditoriums to close in the spring. While many locations have reopened, capacity restrictions and audience skittishness have deeply hurt revenue.
