AMC Entertainment Holdings Inc (NYSE:AMC) faced a setback in its plan to convert AMC Preferred Equity Units (NYSE:APE) into common stock when the court rejected the initial proposal in late July. However, the company’s revised stock conversion plan has now received court approval. This development has caused AMC Preferred Equity Units to rise, while AMC shares have seen a decline.
The revised plan includes a one-for-ten reverse stock split and is reported to be worth up to $120 million. The reverse stock split is scheduled to take place on August 24, followed by the conversion of APE units into common shares on the following day. This conversion will increase the total number of authorized shares of AMC’s Class A common shares from around 524.2 million to 550 million.
In a letter to shareholders, AMC’s CEO, Adam Aron, expressed his belief that the proposed plan is the right path for the company. He highlighted the benefits of the plan, such as strengthening cash reserves, paying down debt, investing in growth initiatives, and pursuing M&A opportunities.
Despite the court’s approval of the revised plan, AMC shares have experienced a 34.8% decline, trading at $3.42, while APE units have risen by 17.5%, trading at $2.09.
The approval of the revised stock conversion plan marks a significant milestone for AMC. CEO Adam Aron expressed his gratitude for the unwavering support and trust of shareholders, emphasizing that their thoughts and support have shaped the future of the company.
In conclusion, AMC Entertainment Holdings Inc is trading lower after the court approved its revised stock conversion plan, while AMC Preferred Equity Units are rising on this development. The implementation of the plan is expected to benefit the company and strengthen its financial standing.