AMC CEO optimistic on future as rival Cineworld shares sink

AMC Entertainment CEO Adam Aron has expressed optimism about the future of his theater chain as Cineworld, its biggest competitor, prepares to file for bankruptcy.

On Friday, sources familiar with the matter told the Wall Street Journal that the owner of Regal Cinemas plans to file a Chapter 11 petition in the United States and may file for insolvency in the United Kingdom. Kirkland & Ellis LLP and AlixPartners were reportedly brought in as advisers on the process.

Representatives for Cineworld, AlixPartners and Kirkland & Ellis LLP did not immediately return FOX Business’ request for comment.

Teleprinter Security Last To change To change %
CMA AMC ENTERTAINMENT HOLDINGS INC 18.02 -1.42 -7.31%
CNWGY CINEWORLD GROUP PLC 0.19 -0.16 -45.98%

On Wednesday, Cineworld revealed that recent admission levels have fallen short of expectations despite a gradual recovery in demand since reopening its theaters in April 2021.

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“These lower admissions levels are due to a limited film slate which is expected to continue through November 2022 and is expected to negatively impact trading and the Group’s liquidity position in the near term,” the company explained. .

A CineWorld cinemas building in Cardinal Park, Ipswich, Suffolk, England, UK (Geography Photos/UCG/Universal Images Group via Getty Images/Getty Images)

Cineworld said it was “evaluating various strategic options to both obtain additional cash and possibly restructure its balance sheet through a full deleveraging operation.”

He warned that any deleveraging would “likely result in a very significant dilution of existing stakes” in the company.

“The group’s business operations should not be affected by these efforts, and Cineworld expects to continue to meet its ongoing business counterparty obligations,” the company added. “Cineworld continues to welcome guests to its theaters in its global markets as usual, without interruption.”

In a statement Thursday, Aron said that while AMC’s movie slate for Q3 2022 is expected to be “relatively small,” the company remains “fairly optimistic about growing demand” for its movie theaters in Q4 2022. . and the calendar year 2023.

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AMC ended the second quarter of 2022 with more than $1 billion in cash after raising “significant” amounts of cash in calendar years 2020 and 2021.

“Our new AMC Preferred Equity, which will begin trading on the New York Stock Exchange on Monday, August 22, should also make us a much stronger company,” Aron added.

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At press time, Cineworld shares are down more than 85% year-to-date, while AMC shares are down around 33% year-to-date.

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