AMC Nears Deal With Private Equity Firm To Avoid Bankruptcy
By Rebecca Baird-Remba July 8, 2020 1:56 pm
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AMC Entertainment Holdings is reportedly close to striking a deal with private equity firm Silver Lake Group that would allow it to restructure and delay filing for Chapter 11 bankruptcy.
The deal would require bondholders to “provide a $200 million senior loan and to swap their unsecured claims at a discount for new, second-lien debt,” according to The Wall Street Journal. Silver Lake, which has a seat on the company’s board, would swap a portion of its $600 million in convertible bonds for first-lien debt.
The entertainment chain’s senior lenders, which include Apollo Global Management (APO), Davidson Kempner Capital Management and Ares Management (ARES) Corp., submitted a counterproposal so they could block Silver Lake from moving into the first-lien position, per the Journal. The group submitted a counterproposal to invest $200 million in senior debt financing, plus $200 million from junior bondholders. The offer mandates that Silver Lake be blocked from swapping into the first-lien position.
However, AMC plans to reject the counteroffer, according to the newspaper.
The potential restructuring would help keep the company afloat as it reopens its theaters across the country and negotiates with creditors in advance of filing for bankruptcy protection. The movie-theater giant shuttered more than 1,000 theaters worldwide, including 630 in the U.S., during the coronavirus pandemic. It plans to reopen 450 of its U.S. theaters by July 30, with another 150 planned for the following week, the Journal reported last month.
