AMC will issue preferred shares under the symbol “APE”
The AMC 25 Theaters in Times Square in New York is seen on Tuesday, July 8, 2014.
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AMC Entertainment appears to have found a creative solution to increase its share count and raise funds after investors balked at a proposal to issue more shares last year.
AMC on Thursday announced plans to issue a dividend to all common stockholders in the form of preferred stock. The company has applied for the preferred stock to be listed on the New York Stock Exchange under the symbol “APE”, a nod to the retail investors who helped save the world’s largest movie theater chain from the brink of the brink. bankruptcy in early 2021, nicknamed “monkeys”.
AMC shares fell about 6% in extended trading Thursday.
“Today, we reward and recognize our passionate and supportive shareholders, both to our shareholders in the United States and abroad,” CEO Adam Aron said in a statement. “Shareholders will receive one AMC preferred stock unit for each share issued by the company of AMC common stock that they hold.”
The company expects to issue a dividend of approximately 517 million APE units later this month. The shares will begin trading on August 22. The new class of shares carries the same voting rights as the existing ordinary shares, the company said in a statement.
AMC raised billions during the pandemic by selling new stock, but ran out of stock to sell. Investors, fearing dilution, rejected the company’s efforts to issue additional shares.
These preferred stock units are a workaround, of sorts, and allow AMC to sell additional stock units as it continues to restart business post-pandemic. After offering the 517 million APE units, AMC will still have about 4.5 billion units remaining that it could sell to raise funds.
“With the creation of the EPAs, AMC deeply and fundamentally strengthens our business,” Aron said in a separate shareholder letter released Thursday. “Given the flexibility that the EPAs will give us, we will likely be able to raise funds if we need to or choose to, which greatly reduces any risk of survival as we continue to work our way through through this pandemic towards recovery and transformation.”
While AMC earned nearly $1.2 billion in revenue in the quarter ended June 30, the company reported a net loss of $121.6 million, according to its second-quarter results Thursday.