AMC Entertainment Holdings, Inc. Agrees to Collaborative Deal with Creditors for …

AMC Entertainment Holdings, Inc. recently made an announcement regarding a Transaction Support Agreement with key creditor groups to strengthen its balance sheet and resolve outstanding litigation issues. This collaborative agreement includes various initiatives that aim to bolster the company’s financial position and fuel its long-term recovery.

One significant aspect of this agreement is the introduction of approximately $223.3 million in new money financing to refinance debt that is set to mature in 2026. This infusion of funds will also provide additional liquidity to support the company’s operations in the future. Additionally, there will be an equitization of at least $143 million of existing debt, with the possibility of converting up to a total of $337 million of outstanding debt. This move is essential to reduce debt burden and enhance the company’s financial stability.

Furthermore, the agreement includes a provision for the full resolution of litigation with specific holders of AMC’s 7.5% Senior Secured Notes due in 2029. This comprehensive package of transactions underscores the strong support of creditors for AMC’s prospects for long-term growth and success. To implement the terms of the agreement, approval from Term Loan Lenders representing at least 50.1% of AMC’s outstanding term loans under its existing Credit Agreement is necessary.

Key highlights of the agreement encompass the injection of new money financing, equitization of existing debt, and the resolution of litigation issues. The Consenting 7.5% Noteholders are set to provide the incremental financing of approximately $223.3 million and will exchange a substantial amount of existing notes for new Senior Secured Notes due in 2029. Similarly, the Consenting Exchangeable Noteholders will receive AMC Class A common stock in exchange for a portion of their existing notes, with the potential to exchange additional debt for equity in the future, contingent upon the trading price of the Company’s Class A common stock.

This collaborative effort between AMC and its creditors signifies a strategic move to fortify the company’s financial foundation and pave the way for sustained growth and profitability. By addressing debt refinancing, equitization, and litigation challenges, AMC aims to position itself favorably to capitalize on the anticipated recovery of the box office landscape in the coming years. The agreement showcases a united front between the company and its creditors to navigate the current financial landscape and emerge stronger in the post-pandemic era.