August 8, 2022
AMC will issue preferred stock under the ticker symbol ‘APE’

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

Richard Levine | Corbis News | Getty Images

AMC Entertainment seems to have found a creative solution to increase its share count and raise funds after investors balked at the proposal to issue more shares last year.

AMC on Thursday said it plans to issue dividend in the form of preferred shares to all common shareholders. The company has applied to list these preferred equity units on the New York Stock Exchange under the symbol “APE”, a sign to retail investors who saw the world’s largest movie theater chain near bankruptcy in early 2021. helped to save. “Ape.”

Shares of AMC fell nearly 6% in extended trading on Thursday.

“Today we are rewarding and recognizing our enthusiastic and supportive shareholders in the US and internationally,” CEO Adam Aarons said in a statement. “Shareholders will receive one AMC preferred equity unit for each company that is part of the AMC common stock that they hold.”

The company is expected to issue a dividend of approximately 517 million APE units later this month. The trading of shares will start from 22nd August. The new class of shares has the same voting rights as existing common shares, The company said in a release,

AMC raised billions during the pandemic by selling new stock, but ran out of shares to sell. Fearing dilution, investors rejected the company’s efforts to issue additional stock.

These preferred equity units are a workaround of sorts, and free AMCs to sell additional units of stock as it continues to revive its business after the pandemic. After offering 51.7 million APE units, AMC will still have around 4.5 billion units left which it can sell to raise funds.

“With the creation of APE, AMC is deeply and fundamentally strengthening our company,” Aaron said in a separate shareholder letter on Thursday. “Given the flexibility that APE will give us, we will be able to raise funds when needed or choose to do so, which minimizes any survival risks as we continue to work our way to recovery and transformation through this pandemic. Huh.”

While AMC posted revenue of about $1.2 billion during the quarter ended June 30, the company reported a net loss of $121.6 million, according to its figures. Second quarter results on Thursday.

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