AMC uses theaters to help restructure billions in debt

AMC Entertainment Holdings Inc. said it reached a sweeping restructuring deal with creditors that will let it delay repayment of more than $1.6 billion of debt for several years, buying it time to execute a turnaround.

The world’s largest movie theater chain reached an agreement that calls for swapping $1.2 billion of term loans due 2026 for new loans due three years later and undertaking a similar swap with $500 million of junior notes, according to a company statement. Exchangeable notes could also be swapped for stock, and some additional 2026 debt may be pushed out to 2029.

It’s a major milestone for AMC, which has been fighting against $4.5 billion of long-term borrowings as theater attendance remains below pre-pandemic levels. Chief Executive Officer Adam Aron said the deal makes AMC “ever more confident in the future of our business.”

AMC moved 175 theaters and related intellectual property out of the reach of some creditors as part of the transaction, according to regulatory filings. The maneuver enables the company to exchange existing debt for new obligations backed by the shifted assets, the filings show.

A representative with AMC declined to comment on the additional details of the swap.

AMC as of March 31 had more than $2.8 billion of maturities due in 2026, according to regulatory filings, including a $1.9 billion term loan and nearly $1 billion of second-lien notes.It has been chipping away at its maturities through other swaps and buybacks. The company recently capitalized on a brief meme stock frenzy to reduce its debt, a playbook it has before used to help shore up liquidity.