AMC in Talks to Leverage European Assets for Another Lifeline
Movie-theater giant is in discussions for a potential financing package backed by its U.K.-based Odeon subsidiary
AMC Entertainment Inc. is in talks with Apollo Global Management Inc. and other top creditors over a potential financing deal backed by the cinema chain’s European assets, according to people familiar with the matter.
AMC, the world’s largest movie-theater company, is negotiating with lenders including Apollo, Davidson Kempner Capital Management LP, and Ares Management Corp. to expand the line of credit available to the company’s U.K.based Odeon Cinemas Group subsidiary, these people said.
The company, which since October has warned of a possible bankruptcy filing as pandemic restrictions shut down theaters worldwide, has also held talks with other creditor groups and potential outside investors, the people said.
AMC didn’t immediately respond to a request for comment.
AMC acquired Odeon, the largest cinema operator in Europe, in 2016. The subsidiary has a 100 million-pound revolving credit facility, worth approximately $135 million, which was fully drawn as of September.
Discussions have centered on upsizing the credit facility by roughly £300 million, though the amount and structure of a potential deal are still under negotiation, the people said.
AMC has been hard hit by the pandemic, which temporarily shut the doors of most of its theaters. Major Hollywood studios have either delayed releasing films or released them straight to streaming services, leaving cinemas with little content to show those viewers willing to brave a trip to the big screen.
Meanwhile, surging coronavirus infections in Europe, as well as the emergence of a morecontagious variant of the virus, have led both the U.K. and German governments to impose a new round of lockdowns.
Since the onset of the pandemic, AMC has taken several steps to find financial lifelines, raising debt and equity financing and completing a debt exchange.
AMC said in December it needed to raise at least $750 million to make it to the other side of the pandemic.
Chief Executive Adam Aron said on CNBC Tuesday that the company raised $204 million of its goal in the first two weeks of December.
The company has been selling stock into the market and raised $100 million in debt financing from hedge-fund manager Mudrick Capital Management LP.