AMC Theaters was in talks with some of Cineworld’s backers about a “potential strategic acquisition” of unspecified theaters in the US and Europe.
News of the talks was included in an SEC filing issued by AMC on Tuesday that follows the Sept. 7 Chapter 11 bankruptcy filing of Cineworld, the world’s second-largest movie theater company and owner of Regal Cinemas in the US. Cineworld operates 747 locations and 9,139 screens in 10 countries.
A Chapter 11 lawsuit allows companies to divest non-core assets, and AMC said the talks were with Cineworld backers who are “exploring strategic alternatives.”
“No final agreement has been reached with the lenders on the terms of any proposal to be presented to debtors in the Cineworld business, and negotiations are not progressing at this time,” AMC added in its filing for filing.
The stock market giant, which has its own heavy debt burden due to the disruption to its industry from the pandemic crisis and its impact on the local multiplex, said any potential acquisition of Cineworld assets will be funded in part by AMC Preferred Equity units or issue APEs. to shareholders and debt financing by the lenders.
AMC has already raised approximately $162 million from its APEs since the stock launched to pay down debt and fund strategic acquisitions of distressed theater assets.
“While AMC reserves the right to continue to explore the acquisition of value-adding strategic assets, there can be no assurance that AMC will resume discussions with the lenders or, if it did, that it would be able to reach an agreement with the lenders. or any other party on the terms of a mutually acceptable proposal,” AMC added in a cautionary statement in the SEC filing.
By considering a broader acquisition of certain Cineworld assets, AMC is betting that the global box office will continue to improve in 2023. Not yet back to pre-pandemic levels, the flow of movies to cinemas remains slower than before and with the pandemic still wreaking havoc in certain markets, including China.
