AMC Entertainment has eliminated its mountain of debt by repurchasing approximately $72.5 million of its 10 percent second lien due 2026 for $50 million, or about a 31 percent discount.
“This action is another step on our recovery path. We will continue to look for creative and meaningful strategies to further strengthen our balance sheet and create value for our shareholders in the future,” Adam Aron, CEO of the parent company of AMC Theaters, said in a statement on Wednesday.
The debt reduction cuts AMC’s annual interest expense by $7.25 million as the company looks to bolster its finances by restructuring a debt load that currently stands at approximately $5.5 billion.
At the height of the coronavirus pandemic, the mega-exhibitor faced possible bankruptcy and took on debt at high interest rates to survive, and more recently has begun to ease its debt burden by cutting its annual interest charges.
Aron said the high-yield debt had been repurchased at a “significant and advantageous” discount, as the exhibitor wants to save money and pay off interest on other maturing debt.
AMC has also used its memestock status to raise a pile of cash to pay off its debt load, while also buying up new theaters and diversifying into other businesses.