AMC Entertainment Raises $162M With APE Share Sales, Buys New Theater: What You Need To Know

AMC Entertainment Holdings Inc AMC announced Monday that it has raised $162 million from its AMC Preferred Equity Units APE since launching the stock just a few months ago.

AMC shares are trading down 7.91% Monday at $4.89, while APE shares are down 6.56% at 68 cents. 

What Happened: AMC said through its APE sales, it has reduced its overall debt obligations by $180 million this year — reflecting both refinancing and the purchase of existing debt at a discount — and that it has acquired a former ArcLight location in Boston, Massachusetts.

CEO Adam Aron said he is disappointed in the discrepancy between the value of AMC’s common stock and its APE preferred equity units.

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“Even though the APE units and our common shares are economically equivalent, it is disappointing that the APE units have since inception consistently traded at a significant discount to the AMC common shares,” Aron said in a statement.

"While the trading prices of the two securities seem to reflect distinct market and trading dynamics, the APEs are serving precisely the purpose originally intended for them.”

The company behind the meme stock expects to end 2022 with between $725 and $825 million in cash, though it said the exact number will depend on the performance of theaters through the end of the year, and including its revolving credit facility.

“AMC reduced debt for the third time this year, including most recently by buying back debt at a substantial 61% discount and is able to contemplate various opportunities to add theaters to our fleet,” the CEO said.

Why It Matters: Aron said the total outlook on the industry is positive going into 2023, adding that the company’s liquidity position is strong as it continues to demonstrate its ability to raise cash, thereby strengthening its balance sheet.

“We also continue to enhance our footprint by acquiring superb theaters without significant capital outlays while at the same time exiting under-performing locations. For so many reasons, we believe the future remains bright for AMC." 

Read next: AMC Entertainment CEO Thanks Apes

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