AMC ditches talks to purchase bankrupt Cineworld’s theaters
Cinema chain AMC Entertainment Holdings said it was no longer in talks on Wednesday to acquire some theaters owned by now-bankrupt Cineworld Group following initial discussions with some lenders.
AMC said the earlier talks were focused on the acquisition of certain theater assets of Cineworld in the United States and Europe, which would be financed partly through the issuance of its preferred stock and debt financing provided by the lenders.
AMC in August announced its preferred share APE as a special dividend for shareholders and a means to raise capital in the future. The company listed these shares in New York under the ticker ‘APE.’
An AMC theatre is pictured amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., January 27, 2021. REUTERS/Carlo Allegri/File Photo
Shares of AMC rose nearly 2% in trading before the bell, while its preferred shares were up more than 3%. Cineworld shares fell 5%.
During the discussions, AMC said Cineworld did not provide any confidential or non-public information, analyses, compilations, or forecasts, among other documents, to the lenders.
AMC added that a definitive deal had not been reached related to any proposal to the debtors in the Cineworld cases, and there was no assurance that it would resume talks. Cineworld did not immediately respond to a Reuters request for comment.
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In October, Cineworld, the world’s second-largest cinema chain operator, announced a bankruptcy settlement with its landlords and lenders, clearing the way for the company to borrow funds and make a $1 billion debt repayment.
The company had agreed to explore a sale of the business and allow creditor input on its business plan as part of its bankruptcy settlement.
With the cinema industry struggling to recover from the pandemic, Cineworld in September forecasted admissions would remain below pre-pandemic levels in the next two years.
