AMC Entertainment Holdings, Inc. (NYSE:AMC) saw its stock decline by 4% early Tuesday after revealing a new agreement with its creditors to restructure existing debt and bolster its financial stability. By later in the day, the stock had recovered some losses, closing down only 0.5%.
The restructuring deal introduces roughly $223 million in fresh capital aimed primarily at refinancing debt scheduled to mature in 2026. It also includes an immediate conversion of at least $143 million of current debt into equity, with the option to raise this conversion amount to $337 million over time.
According to the terms, holders representing about 62% of AMC’s 7.5% Senior Secured Notes due 2029 have agreed to provide the new funding. These creditors will also exchange $590 million of existing notes for $825.1 million in newly issued Senior Secured Notes maturing in 2029.
As part of the agreement, certain Muvico noteholders will convert their debt into 79.8 million shares of AMC Class A common stock. The deal also settles ongoing legal disputes with holders of AMC’s 7.5% Senior Secured Notes.
Adam Aron, AMC’s Chairman and CEO, commented on the deal: “The successful signing of this Transaction Support Agreement is yet another important and strategic move, as AMC continues to fortify our financial footing, and improve the trajectory of our post pandemic recovery.”
The company also highlighted positive industry trends, noting that domestic box office revenue for the second quarter has increased compared to the same period last year. Industry forecasts suggest 2025 could see the strongest box office performance in five years. AMC anticipates this momentum will extend through 2026.
The restructuring will only take effect once term loan lenders holding at least 50.1% of AMC’s outstanding term loans grant their approval.