A private-equity firm that owns a chunk of AMC Entertainment Holdings Inc.’s bonds is converting them into equity following a remarkable rally in the cinema giant’s stock, as AMC struggles to ward off bankruptcy amid closures of movie theaters during the pandemic.
AMC’s share price quadrupled this week after the company inked a substantial debt and equity raise and subsequently became the latest stock to be touted by the online community of retail investors who helped pump up GameStop Inc.
AMC said Thursday that Silver Lake Group LLC on Thursday has elected to convert the $600 million of convertible notes it owns into equity.
The Silver Lake swap illustrates how AMC and other volatile companies caught up in the retail trading mania can benefit from surges of bullish sentiment, in this case enabling AMC to cut a roughly a tenth of its roughly $6 billion in debt.
After closing at $19.90 a share on Wednesday, having more than quadrupled in value from the start of the week, AMC’s stock retraced much of its gains, trading at $7.13 on Thursday morning.
