AMC Theatres Repurchases High-Interest Debt at Steep Discount

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AMC Entertainment has chipped away at its debt mountain by repurchasing around $72.5 million of its 10 percent second lien debt due in 2026 for $50 million, or around a 31 percent discount.

“This action is one more step along our recovery glidepath. We will continue to seek creative and meaningful strategies to further strengthen our balance sheet and create value for our shareholders in the future,” Adam Aron, CEO of AMC Theatres’ parent, said in a statement on Wednesday.

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The debt reduction cuts AMC’s annual interest cost by $7.25 million as the company looks to shore up its finances by restructuring a debt load currently standing at around $5.5 billion.

At the height of the coronavirus pandemic, the mega-exhibitor faced a potential bankruptcy and took on debt at high interest rates to survive and, more recently, has begun to ease its debt burden by reducing its annual interest expense.

Aron said the high-interest debt had been repurchased at a “significant and beneficial” discount as the exhibitor looks to save cash and pay down interest on other maturing debt.

AMC has also used its memestock status to assemble a cash pile to pay down its debt load, while also buying up new theaters and diversifying into other businesses.

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