Shares of AMC Entertainment Holdings (NYSE:AMC) plummeted more than 12% at the market open Thursday after the company announced it has entered an equity distribution agreement worth up to $250 million.
"In accordance with the terms of the Distribution Agreement, we may, through our sales agents, offer and sell from time to time our Class A common stock having an aggregate offering price of up to $250M," it said in the prospectus.
AMC hired Citigroup, Barclays, B. Riley Securities, and Goldman Sachs as its sales agents.
The cinema theater operator said it intends to use the proceeds from the offering for multiple purposes, including improving liquidity, paying down or refinancing current debts, and meeting general corporate requirements.
AMC’s liquidity was adversely affected by a weak first-quarter box office. This downturn partly stems from the Writers Guild of America and Screen Actors Guild-American Federation of Television and Radio Artists strikes last year.
Moreover, higher seasonal working capital needs and subsequent cash depletion have also influenced this decision.