Seeking AlphaSeeking Alpha

AMC Entertainment said in no risk of imminent restructuring

AMC Entertainment (NYSE:AMC), the world's largest cinema chain, is under no risk of an imminent restructuring or bankruptcy, according to a person familiar with the situation.

AMC (AMC) second-lien holders are said to be working on creative ways to reduce the theater chain's debt and raise new money for the company, a person working closely on an exchange proposal told Seeking Alpha. The efforts are expected to reduce AMC's debt and increase runway and liquidity.

An agreement with second lien holders could happen over the next two months, the person familiar explained.

The update comes after Reorg earlier Wednesday published an article that first-lien lenders and second-lien lenders are working with separate restructuring advisors due to potential liquidity concerns, a report which appeared to contribute to the 10% selloff in AMC stock on Wednesday.

The first-lien holders are said likely to have organized to protect themselves against a second-lien exchange, the person familiar said.

AMC didn't return Seeking Alpha email request for comment.

The report comes after AMC shares plunged 77% this year after soaring in 2021 amid the meme-stock frenzy.

AMC Entertainment (AMC) short interest is 22%.

AMC CEO Adam Aron tweeted in September that retail investors had let AMC "raise boatloads of cash" as he tried to reassure investors in the wake of Cineworld Chapter 11 bankruptcy filing.