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Law360 (December 11, 2020, 6:58 PM EST) -- AMC said Friday it has secured $100 million in new debt financing from Mudrick Capital but needs roughly $750 million in additional liquidity if the movie theater company is to avoid bankruptcy.
Kansas-based AMC Entertainment Holdings Inc., represented by Weil Gotshal & Manges LLP, said it expects to receive the funds from the first-lien debt financing in mid-January. Mudrick Capital Management LP, steered by Wachtell Lipton Rosen & Katz, has also agreed to swap $100 million in existing debt for common stock, the announcement said. Mudrick also holds existing AMC notes.
"AMC believes this is an important step in strengthening the company's near-term liquidity position as it deals with the consequences of the global coronavirus pandemic," the announcement said.
The company said in regulatory filings Friday that "substantial doubt exists about the company's ability to continue as a going concern for a reasonable period of time."
Without a serious influx in cash or a jump in movie theater attendance, it expects its existing cash will be "depleted" in January, the filing said. If it's unable to obtain sufficient funds, AMC said it will seek an in-court restructuring that will likely result in a "total loss" for holders of its common stock.
"To remain viable through 2021, the company currently estimates that it will require at least approximately $750 million of additional liquidity to fund its cash requirements," the filing said.
AMC, which owns about 960 movie theaters and 10,700 screens worldwide, has been hit hard by pandemic-related shutdowns. Most of its theaters suspended operations from March to late summer, and many have recently closed again following the latest surge in COVID-19 cases, the company said in regulatory filings.
The company has made numerous efforts to raise cash in recent months. In December, AMC announced a 200-million-share offering, following a 15-million-share sale in September. In August, the company inked a deal to sell its theaters in the Baltic region for roughly $77 million.
New York-based Mudrick Capital specializes in distressed credit and counts endowments, foundations, insurance companies and family offices among its clients, according to its website.
Representatives for AMC and Mudrick did not immediately respond Friday to requests for comment.
AMC is represented by Weil Gotshal & Manges LLP in the deal, which was arranged by Moelis & Co.
Mudrick Capital is represented by a Wachtell Lipton Rosen & Katz team led by finance partner Joshua A. Feltman and corporate partner Elina Tetelbaum and including finance counsel Sumita Ahuja; corporate associate Michael Ye; tax partner Jodi J. Schwartz; associate Swift S.O. Edgar; and antitrust partner Damian G. Didden.
--Additional reporting by Rick Archer and Sierra Jackson. Editing by Ellen Johnson.
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