AMC in talks with Apollo and creditors to leverage Odeon cinema chain for lifeline
AMC is in discussions for a potential financing package backed by its UK-based Odeon subsidiary.
Apollo, which along with Canyon Capital Advisors and Davidson Kempner Capital Management are holders of AMC’s first-lien debt, are urging the company to file for Chapter 11 bankruptcy and have offered $1 billion in debtor-in-possession financing, according to sources close to the situation.
The deal would keep its theater doors open in the coming year — and land AMC in the hands of of the investment firms, the sources said. Apollo — whose embattled chief executive Leon Black is being probed over his ties to dead pedophile Jeffrey Epstein — is leading the campaign to take control of AMC, insiders said.
AMC’s embattled chief executive Adam Aron is resisting Apollo’s overture and looking to buy time. On Friday, the company instead announced it has reached a deal to borrow $100 million in senior loans from Mudrick Capital Management at a 15-percent interest rate.
“Adam Aron is trying to figure out if the vaccine is on its way and will there be enough of a movie business to get past this point,” according to a source close to the talks.
In a written statement, AMC on Friday confirmed that
certain first-lien creditors and other parties have indicated a willingness to provide financing in a bankruptcy scenario, including debtor-in-possession financing,
without naming Apollo or the other firms.
The theater chain also admitted that the $100 million loan from Mudrick won’t keep the lights on past January, and that it will need at least another $750 million in cash to stay afloat through next year.
Accordingly, the company said it’s looking at other alternatives to Apollo’s proposal, including converting some second-lien debt to equity and issuing new stock to raise cash.
It’s not clear what investor appetites will be for more AMC shares, insiders said — especially after Warner Bros. announced this week that its entire movie slate for 2021 will be released simultaneously in theaters and on its HBO Max home-streaming service. The risk that other studios including Disney could adopt similar strategies is uncertain, sources said.
Original Link:
https://nypost.com/2020/12/11/apollo-circling-amc-as-chain-scrambles-to-stay-afloat-sources/