Business

AMC issues preferred shares with stock code ‘APE’

AMC 25 in Times Square in New York is seen on Tuesday, July 8, 2014.

Richard Levine | Corbis News | beautiful pictures

AMC Entertainment seems to have found a creative solution to increase the number of shares and raise capital after investors protested last year’s proposal to issue more shares.

AMC on Thursday said it plans to pay a dividend to all common shareholders in the form of preferred shares. The company filed an application to list these preferred equity units on the New York Stock Exchange under the symbol “APE”, a nod to retail investors who helped rescue the chain. the world’s largest cinema from the brink of bankruptcy in early 2021, dubbed the “ape.”

Shares of AMC fell about 6% in extended trading Thursday.

“Today we are rewarding and recognizing our passionate and supportive shareholders, both for our shareholders in the United States and internationally,” said CEO Adam Aron. “Shareholders will receive one unit of AMC Preferred Equity for each company that has issued AMC common stock that they own.”

The company is expected to issue a dividend of about 517 million APE units later this month. Shares will begin trading on August 22. The new class of shares has the same voting rights as existing ordinary shares, the company said in a release.

AMC raised billions of dong during the pandemic by selling new shares, but ran out of shares to sell. Investors, fearing dilution, rejected the company’s attempt to issue more shares.

These preferred equity units are an alternative, and AMC is free to sell additional stock units as it continues to recover from its business post-pandemic. After offering 517 million APE consolidated, AMC will still have about 4.5 billion units that can be sold to raise funds.

“With the establishment of the APEs, AMC is deeply and fundamentally strengthening our company,” Aron said in a shareholder letter released Thursday. “Given the flexibility that APE will give us, we’ll be able to raise funds if needed or optional, which greatly reduces any existential risk as we continue our efforts to exceed through this pandemic for recovery and transformation.”

While AMC raked in nearly $1.2 billion in revenue for the quarter ended June 30, the company posted a net loss of $121.6 million, according to Thursday’s second-quarter results.

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