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AMC investors voted Tuesday to approve a reverse stock split and the conversion of APE shares into common company shares.
The results of the special shareholders meeting is predicted to pave the way in which for the movie show chain to proceed raising money, reduce its debt load through stock sales and increase its share base. The APE stock was issued lower than a 12 months ago.
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Shares of the corporate fell greater than 15% Tuesday.
Preliminary results for Tuesday’s meeting show that the APE conversion proposal passed with 978 million votes, or 88% of those solid. The second proposal, the reverse split of the corporate’s common shares at a ratio of 10:1, passed by the same margin.
“I would love to commend our shareholders for the wisdom exhibited in your votes by approving these proposals, and doing so by a large margin,” said CEO Adam Aron following the vote. “This can be a landslide victory that shows your determination to maintain AMC a powerful and modern company and the leader of our industry.”
He also noted that APE conversion vote will eliminate the gap between the worth of AMC shares and the popular dividend, which has hampered the corporate’s efforts to sell stock.
Nonetheless, a Delaware Chancery Court injunction hearing planned for April 27 could delay any recent debt-raising motion by the world’s largest theatrical exhibitor.
The hearing is centered around a class-action lawsuit that claims AMC circumvented shareholders who were against adding more shares by creating the popular stock APE. The ticker symbol APE is a reference to AMC retail investors who dubbed themselves “Apes.”
Aron also addressed the April hearing, telling investors that he would keep them updated on developments.
Tuesday’s vote comes lower than a month after AMC posted disappointing fourth quarter earnings. The corporate saw revenue fall 15% to $990.4 million from $1.17 billion within the prior-year period.
Losses also widened, as AMC posted a net lack of $287.7 million, a steeper fall than the $134.4 million in losses it posted a 12 months ago.
Essentially, AMC continues to spend more on operating costs and rent than it’s making from admissions and concessions. As of Dec. 31, the corporate had nearly $850 million of accessible liquidity.
