AMC Entertainment (NYSE:AMC), the world's largest theater operator, is on the verge of a restructuring agreement that could keep the company out of bankruptcy for a while longer, according to a report in The Wall Street Journal. The movie theater chain has been among those businesses hardest hit by the COVID-19 pandemic, as multiplexes around the country have been shuttered to stop the spread of the virus.
The arrangement, which could be announced in the coming days, would require AMC's bondholders to provide $200 million in senior loans while also swapping unsecured debt at a discount for second-lien secured debt.
Late last month, AMC announced plans to push back the reopening of its theaters to July 30, resuming operations at about 450 locations, with an additional 150 coming online a week later. The company is planning to have about 1,000 theaters open across the globe by early August.
The company is hoping to kick off its reopening with a bang, arranging it around the long-delayed debuts of Disney's live-action remake of Mulan and sci-fi thriller Tenet from AT&T's Warner Bros. Studios.
AMC originally planned its grand reopening in mid-July, at just 30% capacity, with all patrons and employees required to wear masks. The date was pushed out to coincide with the pending release of expected blockbusters in hopes of bringing moviegoers back to theaters.
Among theater companies, AMC has been hit particularly hard due to the extended closure of its locations and high debt load. AMC reported first-quarter revenue of $942 million, down nearly 22%, resulting in a net loss of more than $2.17 billion. The second quarter is expected to be even worse, with theaters shuttered for the entire quarter. AMC's balance sheet carries more than $5 billion in debt with less than $300 million in cash.