AMC plunges as investors approve reverse stock split, APE share conversion

AMC investors voted Tuesday to o.k. a reverse banal divided and the conversion of APE shares into communal institution shares.

The effect of the peculiar shareholders gathering is expected to pave the mode for the movie theatre concatenation to proceed raising cash, trim its indebtedness load done banal income and summation its stock base. The APE banal was issued little than a twelvemonth ago.

Shares of the institution fell much than 17% Tuesday.

Preliminary results for Tuesday's gathering amusement that the APE conversion connection passed with 978 cardinal votes, oregon 88% of those cast. The 2nd proposal, the reverse divided of the company's communal shares astatine a ratio of 10:1, passed by a akin margin.

"I would similar to commend our shareholders for the contented exhibited successful your votes by approving these proposals, and doing truthful by a wide margin," said CEO Adam Aron pursuing the vote. "This is simply a landslide triumph that shows your determination to support AMC a beardown and innovative institution and the person of our industry."

He besides noted that APE conversion ballot volition destruct the spread betwixt the worth of AMC shares and the preferred dividend, which has hampered the company's efforts to merchantability stock.

However, a Delaware Chancery Court injunction proceeding planned for April 27 could hold immoderate caller debt-raising enactment by the world's largest theatrical exhibitor.

The proceeding is centered astir a class-action suit that claims AMC circumvented shareholders who were against adding much shares by creating the preferred banal APE. The ticker awesome APE is simply a notation to AMC retail investors who dubbed themselves "Apes."

Aron besides addressed the April hearing, telling investors that helium would support them updated connected developments.

Tuesday's ballot comes little than a period aft AMC posted disappointing 4th fourth earnings. The institution saw gross autumn 15% to $990.4 cardinal from $1.17 cardinal successful the prior-year period.

Losses besides widened, arsenic AMC posted a nett nonaccomplishment of $287.7 million, a steeper autumn than the $134.4 cardinal successful losses it posted a twelvemonth ago.

Essentially, AMC continues to walk much connected operating costs and rent than it is making from admissions and concessions. As of Dec. 31, the institution had astir $850 cardinal of disposable liquidity.