AMC has announced a deal to periodically issue and sell its Class A common stock, with a target aggregate offering value of up to $250 million.
On March 28, 2024, AMC Entertainment (NYSE: AMC) engaged in an equity distribution agreement (the “Equity Distribution Agreement”) with Citigroup Global Markets Inc., Barclays Capital Inc., B. Riley Securities, Inc., and Goldman Sachs & Co. LLC as sales agents (individually, a “Sales Agent,” collectively, the “Sales Agents”). The agreement aimed to sell shares of Class A common stock, par value $0.01 per share, of the Company (the “Common Stock”) through an “at-the-market” offering program, with an aggregate offering price of $250,000,000.
Per the terms of the Equity Distribution Agreement, the Sales Agents will exert reasonable efforts, consistent with their usual trading practices, applicable laws and regulations, and the rules of the New York Stock Exchange, to sell the Common Stock as per the Company’s instructions, which may include specific price, time, or size limits.
Each Sales Agent stands to receive compensation of up to 2.5% of the gross sales price of the Common Stock sold through them under the Equity Distribution Agreement. Additionally, the Company has agreed to reimburse the Sales Agents for certain specified expenses and provide them with customary indemnification and contribution rights.
The Company retains the discretion to decide whether to sell any Common Stock under the Equity Distribution Agreement and can suspend solicitation and offers at any time. Furthermore, the Company reserves the right to terminate the Equity Distribution Agreement for any reason upon written notice to the Sales Agents, and each Sales Agent can terminate the agreement with respect to themselves by providing written notice to the Company.
The net proceeds, if any, from the sale of the Common Stock under the Equity Distribution Agreement are intended to be used by the Company for various purposes. These include enhancing liquidity, repaying, refinancing, redeeming, or repurchasing existing indebtedness, and supporting general corporate needs. The offering is particularly crucial to bolster the Company’s liquidity following a challenging first quarter, attributed in part to strikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists in 2023, increased seasonal working capital requirements, and resulting cash burn.
The Common Stock will be offered and sold in accordance with the Company’s shelf registration statement on Form S-3 (File No. 333-266536) filed with the Securities and Exchange Commission (SEC) on August 4, 2022. A prospectus supplement, dated March 28, 2024 (the “ATM Prospectus Supplement”), has been filed with the SEC in connection with the offer and sale of the Common Stock, supplementing the prospectus dated August 4, 2022.
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