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AMC Entertainment Surges After Raising $917M In Fresh Capital, Avoids Bankruptcy

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AMC Entertainment Surges After Raising $917M In Fresh Capital, Avoids Bankruptcy

Shares of AMC Entertainment Holdings Inc (NYSE: AMC) surged higher by 35% Monday morning after the movie theater company said it has successfully raised nearly $1 billion in fresh capital since December.

What Happened: AMC said in a press release it raised or signed commitment letters to receive $917 million of new equity and debt capital. The capital infusion will allow the company to "make it through this dark coronavirus-impacted winter."

AMC's belief it has enough capital to operate through "deep into 2021" is also based on the assumption it will make progress in talks with theater landlords about the amounts and timing of lease payments, the company said. In addition, the company is assuming that a successful vaccination initiative against the novel coronavirus will act as a catalyst for theater attendance.

Related: AMC Still Needs $550M To Stay Afloat Through 2021, CEO Says

Why It's Important: Investors are "cautioned accordingly" as a successful resolution to the global health crisis can not be guaranteed. Nevertheless, the "sun is shining on AMC" as any talk of a move to file for bankruptcy is "completely off the table," AMC CEO Adam Aron said.

AMC's stock has also seen recent momentum, driven by retail investor interest.

What's Next: AMC's success over the medium term requires "much of the general public in the U.S. and abroad to be vaccinated."

"To that end, we are grateful to the world's medical communities for their heroic efforts to thwart the COVID virus," the CEO said. "Similarly, we welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program."

AMC traded around $4.67 per share at publication time.

 

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