The AMC chain in the US – which owns Odeon over here – has come up with a debt agreement that’ll keep the company solvent until at least next spring.
The challenges facing the cinema exhibition industry have been pretty obvious these past few months, but even before Coronavirus struck, the AMC chain in the US was up against a few problems. The company, which owns Odeon cinemas, has been carrying debt into the billions, and whilst it was planning to use that in part to make an acquisition or two, obviously things changed.
With no money coming through its tills for the past three months, the company reported a quarterly loss of – yikes – $2.2bn last month, and had announced that it was expected its US sites to be fully open by the middle of this month. That looks on the ambitious side.
The bottom line was that concerns were growing as to how AMC could stay in business, with its debt rising and income all but non-existent.
We now learn though that it’s struck a deal in the US to keep the business solvent. As per a report at Variety, and I can’t promise the next few lines are the easiest or most fun to read, “under the deal, Silver Lake Group will purchase $100 million in first lien notes, adding to the $600 million in convertible bonds that it already holds in AMC”.
It continued: “The company, which is the world’s largest theater chain, said in public filings that it will raise $200 million in cash by allowing debt-holders to swap their securities at a discount. As part of the deal, the interest they receive would be either 10% in cash or 12% in additional notes that would be due in 2026”.
Bottom line of that is that AMC has enough to keep it going through to next spring, but with the cinema industry still clouded in uncertainty – appreciating it’s not alone there – beyond that is anybody’s guess at the moment. Still, AMC will remain solvent until that time at least, and there’s no clear immediate threat to the Odeon chain.
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