AMC Entertainment Holdings, Inc. (NYSE: AMC) (“AMC”) announced
today that it is has amended certain terms of its previously
announced offers to exchange (as amended as described below, the
“Exchange Offers”) with respect to its outstanding notes listed in
the table below (collectively, the “Existing Subordinated Notes”),
upon the terms and subject to the conditions set forth in the
Confidential Offering Memorandum, dated June 3, 2020 (as amended by
the press releases dated June 16, 2020 and June 22, 2020 and the
amended offering memorandum, dated as of July 10, 2020, and as may
be further amended or supplemented from time to time, the “Offering
Memorandum”). The Company views the transaction as highly
beneficial to the Company and its shareholders. Upon the completion
of the transaction, the Company would have (i) reduced the
principal amount of its total debt liabilities, (ii) extended the
maturities of a significant percentage of its outstanding debt,
(iii) decreased cash interest expense and (iv) increased its cash
and liquidity position to help navigate the on-going COVID-19
pandemic.
AMC has amended the Exchange Offers with the support of holders
of the Existing Subordinated Notes representing more than 73% of
the aggregate principal amount of Existing Subordinated Notes,
which represent a majority of the holders of each series of
Existing Subordinated Notes, and who have agreed to tender their
Existing Subordinated Notes in the Exchange Offers for New Second
Lien Notes and subscribe for New First Lien Notes to be issued by
the Company. All capitalized terms used but not defined in this
press release have the meanings given to them in the Offering
Memorandum.
Pursuant to the amended Exchange Offers, AMC is offering to
issue, in a private offering to eligible noteholders, new 10%/12%
Cash/PIK Toggle Second Lien Secured Notes due 2026 (the “New Second
Lien Notes”) in exchange for the Existing Subordinated Notes. Any
and all Existing Subordinated Notes validly tendered (and not
validly withdrawn) will be accepted for exchange. Each eligible
holder who validly tenders Existing Subordinated Notes in the
Exchange Offers may elect to subscribe (the “Subscription Right”)
for a pro rata portion of new 10.5% first lien secured notes due
2026 (the “New First Lien Notes”), to be issued by AMC in an
aggregate principal amount of $200 million. An eligible holder that
elects to subscribe for its full pro rata share of the New First
Lien Notes (a “Fully Participating Holder”) will also be entitled
to receive the additional consideration in the Exchange Offers
described below. Certain holders of Existing Subordinated Notes
have also agreed to backstop 100% of the New First Lien Notes not
otherwise purchased (the “Backstop Parties”). As consideration for
the Backstop Parties’ backstop commitment, the Backstop Parties
will be entitled to receive a cash premium equal to 10% of the
aggregate amount of New First Lien Notes issued, less the amount of
any premiums paid to Participating Holders to the extent such
holders exercise their oversubscription rights as described in the
Offering Memorandum, and 5,000,000 shares of the Company’s Class A
common stock. In addition, certain of the initial Backstop Parties
will receive a 2% arranger premium.
The New Second Lien Notes and New First Lien Notes will be fully
and unconditionally guaranteed on a joint and several basis by each
of AMC’s subsidiaries that currently guarantee its obligations
under AMC’s senior credit facilities (the “Senior Credit
Facilities”). The New Second Lien Notes will be secured by a
second-priority lien on substantially all of the tangible and
intangible assets owned by AMC and the guarantor subsidiaries that
secure obligations under the Senior Credit Facilities (the
“Collateral”). The New First Lien Notes will be secured by a
first-priority lien on the Collateral. The New Second Lien Notes
will be subordinated in right of payment to all indebtedness of AMC
that is secured by a first-priority lien on the Collateral.
The following table set forth certain terms of the amended
Exchange Offers:
Principal Amount of New Second
Lien Notes(1)
CUSIP Number or Common Code/ISIN
of Existing Subordinated Notes
Title of Existing Subordinated
Notes
Principal Amount of Existing
Subordinated Notes Outstanding
Early Exchange Consideration if
Tendered prior to the Early Deadline(2)
Exchange Consideration if
Tendered after the Early Deadline
151289060 / XS1512809606
6.375% Senior Subordinated Notes due
2024
£500,000,000(3)
Non-Participating Holders: $650.00 U.S.
Dollar Equivalent principal amount of New Second Lien Notes
Fully Participating Holders:
$725.00-$800.00(4) U.S. Dollar Equivalent principal amount of New
Second Lien Notes
Non-Participating Holders: $630.00 U.S.
Dollar Equivalent principal amount of New Second Lien Notes
Fully Participating Holders:
$705.00-$780.00(4) U.S. Dollar Equivalent principal amount of New
Second Lien Notes
00165A AH1 / US00165AAH14
5.75% Senior Subordinated Notes Due
2025
$600,000,000
Non-Participating Holders: $650.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$725.00-$800.00(4) principal amount of New Second Lien Notes
Non-Participating Holders: $630.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$705.00-$780.00(4) principal amount of New Second Lien Notes
00165C AB0 / US00165CAB00
5.875% Senior Subordinated Notes Due
2026
$595,000,000
Non-Participating Holders: $650.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$725.00-$800.00 (4) principal amount of New Second Lien Notes
Non-Participating Holders: $630.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$705.00-$780.00 (4) principal amount of New Second Lien Notes
00165C AD6 / US00165CAD65
6.125% Senior Subordinated Notes Due
2027
$475,000,000
Non-Participating Holders: $650.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$725.00-$800.00 (4) principal amount of New Second Lien Notes
Non-Participating Holders: $630.00
principal amount of New Second Lien Notes.
Fully Participating Holders:
$705.00-$780.00 (4) principal amount of New Second Lien Notes
(1)
For each $1,000 or £1,000 principal amount
of Existing Subordinated Notes, as applicable.
(2)
Includes the Early Participation Premium
of $20 (or in the case of the 2024 Subordinated Sterling Notes, $20
U.S. Dollar Equivalent) principal amount of New Second Lien Notes
for each $1,000 (or in the case of the 2024 Subordinated Sterling
Notes, $1,000 U.S. Dollar Equivalent) principal amount of Existing
Subordinated Notes validly tendered and not validly withdrawn prior
to the Early Deadline. Any eligible holder who validly tenders
after the Early Deadline but prior to the applicable Expiration
Time will only be entitled to receive the Exchange Consideration in
exchange for the Existing Subordinated Notes accepted in the
Exchange Offers and will not receive the Early Participation
Premium.
(3)
Equivalent to $617,271,000 U.S. dollars
based on an exchange rate as of March 31, 2020 or $630,775,000 U.S.
dollars based on an exchange rate at July 9, 2020 of £1.00 =
$1.26155.
(4)
The minimum Exchange Consideration
presented in the range assumes that all Exchanging Holders are also
Participating Holders up to their pro rata share. The maximum
Exchange Consideration presented in the range assumes that 50% of
the Exchanging Holders are also Participating Holders up to their
pro rata share. The maximum Exchange Consideration presented is
illustrative only based on 50% participation and should not be
construed as a cap. The principal amount of New Second Lien Notes
to be issued for each $1,000 or £1,000 principal amount of Existing
Subordinated Notes accepted in the Exchange Offers will based on a
formula such that blended rate of all New Second Lien Notes issued
in the Exchange Offers will be $725 principal amount per $1,000
principal amount of Existing Subordinated Notes tendered. The
consideration to be paid to Fully Participating Holders for each
$1,000 or £1,000 principal amount of Existing Subordinated Notes
will be calculated based on the quotient of (A) 72.5% of aggregate
principal amount of all Existing Subordinated Notes tendered by
Participating and Non-Participating Holders minus 65% of the
aggregate principal amount Existing Subordinated Notes tendered by
Non-Participating Holders, divided by (B) the aggregate principal
amount of Existing Subordinated Notes validly tendered by Fully
Participating Holders in the Exchange Offers, multiplied by $1,000
or £1,000, as applicable. For purposes of calculating these
amounts, all pound sterling amounts will be calculated using the
U.S. Dollar Equivalent amount.
AMC is extending the Early Deadline, Withdrawal Deadline and
Expiration Time. The Early Deadline and Withdrawal Deadline were
previously extended to 11:59 p.m., New York City time, on July 10,
2020, and will now be further extended to 5:00 p.m., New York City
time, on July 24, 2020, unless further extended. The Expiration
Time was previously 11:59 p.m., New York City time, on July 10,
2020 and will now be extended to 5:00 p.m., New York City time, on
July 24, 2020, unless further extended. Accordingly, holders who
tender their Existing Subordinated Notes prior to such time will
receive the Early Exchange Consideration. The Final Settlement Date
(as defined in the Offering Memorandum) will occur five business
days after the Expiration Time and is now expected to occur on July
31, 2020.
AMC reserves the right to terminate, withdraw, amend or extend
the Exchange Offers and Consent Solicitations, either as a whole or
with respect to one or more series of Existing Subordinated Notes,
at any time, subject to the terms and conditions set forth in the
Offering Memorandum.
AMC’s obligation to accept and exchange the Existing
Subordinated Notes validly tendered pursuant to the Exchange Offers
and to issue New First Lien Notes is subject to certain conditions,
as set forth in the Offering Memorandum, including (i) there being
validly tendered (and not validly withdrawn) at least a majority in
aggregate principal amount of each series of the Existing
Subordinated Notes in the Exchange Offers, (ii) the consent of
holders of a majority of the principal amount of AMC’s 2.95% Senior
Convertible Notes due 2024 (the “Convertible Notes”) issued
pursuant to indenture, dated as of September 14, 2018, between AMC,
the guarantors party thereto and U.S. Bank National Association
(the “Convertible Notes Indenture”) and (iii) Silver Lake
purchasing $100 million of additional first lien with identical
terms to the New First Lien Notes at a cash purchase price of 90%
of their principal amount less a 2% arranger premium, and (iv) the
consent of holders of a majority of the Convertible Notes to the
$100 million of additional basket availability of first lien
indebtedness which shall be provided under the terms of the New
First Lien Notes and the New Second Lien Notes. Concurrently with
the Exchange Offers, to obtain this consent, we expect to enter
into an amendment and exchange pursuant to which the maturity of
the Convertible Notes will be extended to May 1, 2026 and a
first-priority lien on the Collateral will be granted to secure
indebtedness thereunder.
Concurrently with the Exchange Offers, AMC is also soliciting
the consents of the eligible holders to amend the indentures
governing the Existing Subordinated (the “Proposed Amendments”) to
eliminate or modify certain of the covenants, restrictive
provisions and events of default and to remove the existing
subsidiary guarantees of the Existing Subordinated Notes. The
consents of eligible holders representing at least a majority of
the aggregate principal amount of each series of the Existing
Subordinated Notes outstanding will be required in order to adopt
the Proposed Amendments to the applicable indenture. Each eligible
holder who validly tenders Existing Subordinated Notes will be
deemed to have delivered consents to the Proposed Amendments for
such series of Existing Subordinated Notes, with respect to the
aggregate principal amount of Existing Subordinated Notes for such
series validly tendered by such eligible holder. Eligible holders
may not deliver consents with respect to the Existing Subordinated
Notes without tendering their Existing Subordinated Notes and may
not tender their Existing Subordinated Notes without delivering
consents with respect to the Existing Subordinated Notes.
Based on information provided by the Exchange and Information
Agent, as of 5:00 p.m. New York City time on July 9, 2020, the
following amounts of Existing Subordinated Notes have been validly
tendered in the Exchange Offer:
Series of Existing Subordinated
Notes
Total Aggregate Principal
Amount Validly Tendered
Percentage of Outstanding
Existing Subordinated Notes Validly Tendered
6.375% Senior Subordinated Notes due
2024
£ 42,542,000
8.51%
5.75% Senior Subordinated Notes due
2025
$ 9,963,000
1.66%
5.875% Senior Subordinated Notes due
2026
$ 18,780,000
3.16%
6.125% Senior Subordinated Notes due
2027
$ 10,941,000
2.30%
The Existing Subordinated Notes that were previously tendered on
or prior to July 10, 2020, will be promptly returned to holders and
such holders who desire to participate in the Exchange Offers and
Consent Solicitations, as amended, must validly tender their
Existing Subordinated Notes pursuant to the terms of the Offering
Memorandum.
Important Information about the Exchange Offers and Consent
Solicitations
This press release is issued pursuant to Rule 135c under the
Securities Act of 1933, as amended (the "Securities Act"). This
press release is neither an offer to sell nor the solicitation of
an offer to buy the New Second Lien Notes, New First Lien Notes or
any other securities and shall not constitute an offer,
solicitation or sale in any jurisdiction in which, or to any person
to whom, such an offer, solicitation or sale is unlawful. The New
Second Lien Notes and New First Lien Notes have not been, and will
not be, registered under the Securities Act or any state securities
laws, or the securities laws of any other jurisdiction an may not
be offered or sold in the United Stated absent registration or an
applicable exemption from registration requirements. The Exchange
Offers, and the offering of the New Second Lien Notes and New First
Lien Notes, are being made only (1) to persons reasonably believed
to be (A) “qualified institutional buyers” as defined in Rule 144A
under the Securities Act or (B) institutions where permitted in
certain jurisdictions that can provide certifications and other
documentation satisfactory to AMC that they are “accredited
investors” as defined in subparagraphs (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act, in each case in a private
transaction in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 4(a)(2)
thereof and (2) outside the United States, to persons other than
“U.S. persons” as defined in Rule 902 under the Securities Act in
offshore transactions in compliance with Regulation S under the
Securities Act.
The Exchange Offers and Consent Solicitations are being made
only pursuant to the Offering Memorandum. The Offering Memorandum
and other documents relating to the Exchange Offers and Consent
Solicitations will be distributed only to eligible holders. The
Exchange Offers are not being made to holders of Existing
Subordinated Notes in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. The New Second Lien
Notes and the New First Lien Notes have not been approved or
disapproved by any regulatory authority, nor has any such authority
passed upon the accuracy or adequacy of the Offering Memorandum.
None of AMC, the dealer manager, the solicitation agent, the
exchange agent, the information agent or any trustee (or its
agents) of the Existing Subordinated Notes, the New Second Lien
Notes or the New First Lien Notes makes any recommendation as to
whether holders of Existing Subordinated Notes should participate
in the Exchange Offers or consent to the Proposed Amendments.
Holders who desire a copy of the eligibility letter should
contact Global Bondholder Services Corporation, the information
agent for the Exchange Offers and Consent Solicitations, at (866)
470-4300 (U.S. Toll-free). Banks and brokers should call (212)
430-3774. The eligibility letter may also be found here:
https://gbsc-usa.com/eligibility/amc. Global Bondholder Services
Corporation will provide copies of the Offering Memorandum to
eligible holders.
There are no registration rights associated with the New Second
Lien Notes or New First Lien Notes and AMC has no intention to
offer to exchange the New Second Lien Notes or New First Lien Notes
for notes registered under the Securities Act or to file a
registration statement with respect to the New Second Lien Notes or
New First Lien Notes.
This press release, the Offering Memorandum and any other
documents or materials relating to the Exchange Offers and Consent
Solicitations may only be communicated to persons in the United
Kingdom in circumstances where Section 21 of the Financial Services
and Markets Act 2000 (the "FSMA") does not apply. Accordingly, this
press release and the Offering Memorandum are only for circulation
to (i) persons who are outside the United Kingdom, (ii) investment
professionals falling within Article 19(5) of the FSMA (Financial
Promotion) Order 2005, as amended (the "Order"), (iii) high net
worth entities, and other persons to whom the communication may
lawfully be communicated, falling within Article 49(2)(a) to (d) of
the Order or (iv) persons to whom an invitation or inducement to
engage in investment activity (within the meaning of Section 21 of
the FSMA) in connection with the communication may otherwise
lawfully be communicated or caused to be communicated (all such
persons together being referred to for purposes of this paragraph
as "relevant persons"). The New Second Lien Notes will only be
available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such New Second Lien Notes will be
engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on the Offering Memorandum
or any of its contents and may not participate in the Exchange
Offers.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the federal securities laws. In many cases, these
forward-looking statements may be identified by the use of words
such as “will,” “may,” “should,” “believes,” “expects,”
“anticipates,” “estimates,” “intends,” “projects,” “goals,”
“objectives,” “targets,” “predicts,” “plans,” “seeks,” and
variations of these words and similar expressions. Any
forward-looking statement speaks only as of the date on which it is
made. These forward-looking statements may include, among other
things, statements related to the expected timing of and future
actions with respect to the Exchange Offers and Consent
Solicitations the completion of the transactions contemplated
thereby and statements related to AMC’s current expectations
regarding the performance of its business, financial results,
liquidity and capital resources, and the impact to its business and
financial condition of, and measures being taken in response to,
the COVID-19 virus, and are based on information available at the
time the statements are made and/or management’s good faith belief
as of that time with respect to future events, and are subject to
risks, trends, uncertainties and other facts that could cause
actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements. These
risks, trends, uncertainties and facts include, but are not limited
to, risks related to: the impact of the COVID-19 virus on AMC, the
motion picture exhibition industry, and the economy in general,
including AMC’s response to the COVID-19 virus related to
suspension of operations at theatres, personnel reductions and
other cost-cutting measures and measures to maintain necessary
liquidity and increases in expenses relating to precautionary
measures at AMC’s facilities to protect the health and well-being
of AMC’s customers and employees; the general volatility of the
capital markets and the market price of AMC’s Class A common stock;
motion picture production and performance; AMC’s lack of control
over distributors of films; increased use of alternative film
delivery methods or other forms of entertainment; general and
international economic, political, regulatory and other risks,
including risks related to the United Kingdom’s exit from the
European Union or widespread health emergencies, or other pandemics
or epidemics; risks and uncertainties relating to AMC’s significant
indebtedness, including AMC’s borrowing capacity under its
revolving credit agreement; AMC’s ability to execute cost cutting
and revenue enhancement initiatives as previously disclosed and in
connection with response to COVID-19; limitations on the
availability of capital; AMC’s ability to refinance its
indebtedness on favorable terms; availability of financing upon
favorable terms or at all; risks relating to impairment losses,
including with respect to goodwill and other intangibles, and
theatre and other closure charges; and other factors discussed in
the reports AMC has filed with the SEC. Should one or more of these
risks, trends, uncertainties or facts materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by the
forward-looking statements contained herein. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved. For a detailed discussion of risks,
trends and uncertainties facing AMC, see the section entitled “Risk
Factors” in the Offering Memorandum, the section entitled “Risk
Factors” in AMC’s Form 10-K for the year ended December 31, 2019
and Form 10-Q for the three months ended March 31, 2020, each as
filed with the SEC, and the risks, trends and uncertainties
identified in its other public filings. AMC does not intend, and
undertakes no duty, to update any information contained herein to
reflect future events or circumstances, except as required by
applicable law.
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INVESTOR RELATIONS: John Merriwether, 866-248-3872
InvestorRelations@amctheatres.com
MEDIA CONTACTS: Ryan Noonan, (913) 213-2183
rnoonan@amctheatres.com
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