AMC Entertainment Holdings Inc. said Sunday it has submitted a revised proposal for its stock-conversion plan, after a judge rejected a settlement Friday that would have given a green light to the deal.
In a letter to investors that was posted Sunday on Twitter, AMC Chief Executive Adam Aron said that a modified proposal was filed Saturday with the Delaware Chancery Court intended to address the court’s concerns. If the court agrees, Aron said he hopes to implement the plan “as soon as possible.”
Movie-theater chain AMC AMC, +1.62% has wanted to turn its its so-called APE APE, -2.17% — or AMC Preferred Equity — preferred units into common stock as part of its battle to eliminate debt. But Delaware Chancery Court Vice Chancellor Morgan Zurn on Friday rejected a settlement with opposing shareholders that would have allowed that conversion to move forward. That sent AMC shares rocketing more than 60% higher in after-hours trading Friday.
“AMC must be in a position to raise equity capital,” Aron stressed in his letter Sunday, saying that if the company is unable to do so, the risk of running out of cash in 2024 or 2025 rises.
“The risk of financial collapse is not whimsical,” Aron said, noting the bankruptcies of rival theater chain Cineworld/Regal and retailer Bey Bath & Beyond.
AMC shares are up 8% year to date, but have sunk 54% over the past 12 months.