Giant theater chain AMC Entertainment filed today to sell up to 425 million AMC Preferred Equity Units, or APEs, its new securities that have seen a price collapse amid a sour market and investor backlash.They sank some more early Monday, then popped higher.AMC distributed the initial batch of APE shares to stockholders in August and they trade on the NYSE.
Each APE unit has the same economic and voting rights as one share of common stock. CEO Adam Aron characterized the distribution as a gift but AMC’s large base of retail shareholders disagreed.
This vocal group had previously derailed AMC’s plans to issue new common stock, preventing the company from raising cash to help pay down its hefty debt of about $5.4 billion.
So the APEs were a workaround; a new currency AMC can sell to raise fresh funds without shareholder approval.“It was a nice way to get around their investors, who weren’t going to let them issue more shares to raise more cash.
Read more on deadline.com
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