AMC Movie Theater Chain Reaches New Debt Restructuring Deal, Stocks Jump

(Reuters) – AMC Entertainment Holdings has reached an agreement with its creditors to extend the maturity of its debt by up to $2.45 billion, the movie theater chain said on Monday, sending its shares up 12.6 percent in late afternoon trading.

As part of the agreement, the company will transfer certain leases, properties and related assets and rights of 175 theaters to a newly formed subsidiary, Muvico, as well as intellectual property, including the AMC brand.

The deal extends maturities from 2026 to 2029 and beyond, and will also allow the company to reduce its debt by $464 million by converting the exchangeable notes into equity.

The world’s largest cinema chain has been dealing with the fallout from strikes in Hollywood last year, which halted production and affected U.S. theater chains.

However, CEO Adam Aron signaled a rebound on Monday.

“The box office challenges of the first half of 2024 are now behind us. Recovery momentum is back,” Aron said in a statement.

“We expect strong year-over-year box office growth in the second half of 2024, continuing into 2025 and 2026.”

AMC shares have also been up and down in recent months after the brief return in May of stock market influencer “Roaring Kitty” Keith Gill, who rekindled the “meme stock” frenzy. The stock has lost about 18% of its value year-to-date through the last close.

The company announced Monday that it will also issue $1.2 billion of new secured term loans due 2029 in exchange for an open market purchase of senior secured term loans due 2026.

AMC had completed a series of refinancing transactions in April and amended its credit agreement.

The company has reduced its gross outstanding debt by $516 million since September last year, it said in May.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Devika Syamnath and Sriraj Kalluvila)