AMC Shares Add 12% As Report Says Company Nears Deal To Avoid Bankruptcy

The shares of AMC Entertainment Holdings Inc. AMC surged in the after-hours session on Tuesday after a Wall Street Journal report said the company is nearing a deal that will help it avoid bankruptcy, at least in the short term.

What Happened

The movie theater chain operator is close to accepting a $200 million senior debt financing offer led by private equity firm Silver Lake, according to the Journal. This financing will be on top of a $200 million committed by junior bondholders.

AMC is choosing the restructuring deal with Silver Lake over a rival financing offer made by leading lenders, including Apollo Global Management Inc. APO, Ares Management Corp. ARES, and Davidson Kempner Capital Management LP, the Journal reported.

Why It Matters

The Kansas-based company's stock has lost about 43% of its value this year as novel coronavirus (COVID-19) pandemic forced its theaters across the United States to keep shut.

AMC has said it expects to start reopening theaters at the end of this month in phases.

Price Action

The company's shares traded 11.6% in the after-hours session Tuesday after closing the regular session 3.5% lower at $4.13.

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