Movie theatre chain company AMC Entertainment is looking at cutting high-interest costs. As per a New Year resolution made public by CEO Adam Aron, he wants to cut the burdensome interest cost on debt which the company took during the pandemic.
AMC took debts at a high-interest rate to survive in 2020 and 2021, as per a tweet from the CEO Monday. He said he would like to refinance some existing debts at lower interest rates to reduce the interest expense and push maturities of new debts by several years and leverage cushion.
The company paid more than $30 million interest on its borrowings for the nine months ending September 30 as per its regulatory filings. This was up from $219 million paid for the same period in the year fiscal year 2019.
After the pandemic tool its grip on the U.S., many theatre operators took several rounds of emergency loans to save their company from going bankrupt.
AMC caught the attention of fanatic bulls on Reddit and Twitter, which sent the company’s stock soaring to a record high of $62.55 last year. This dramatic comeback on the stock market allowed the company to cut its borrowings by selling its shares and raising its liquidity. The company, however, still has outstanding double digits coupons debts.
CEO Aron did not specify how he would refinance his existing debts. He only tweeted, saying that there is no guarantee of success, but the company will try hard to get it done. The Management is looking at creative ways to secure the future for AMC Entertainment Holdings Inc.
AMC’S 10% bond is due 2026, and it was the most actively traded in the U.S. high yield market on Monday. As per Trace, the bond rose to 99.5 cents, up by half a cent on the dollar in New York. AMC shares have jumped to $28.10, up by 33.3% on Monday.
