#AMC Entertainment shares surge as chain nears deal to avoid bankruptcy

AMC Entertainment, struggling as its cinemas have been shuttered by coronavirus lockdowns, saw its stock surge nearly 10 percent Wednesday on reports that it’s nearing a debt restructuring deal to avoid bankruptcy

The company, which operates about 1,000 theaters globally, has been trying for weeks to get bond holders to agree to swap debt at a discount but only a relatively small percentage had agreed as of June 30. On Tuesday, the firm said in a securities filing that lenders had extended the deadline.

However, AMC is nearing a deal for bondholders to provide it a $200 million senior loan and exchange subordinated debt for new senior debt, according to a Wednesday report from The Wall Street Journal.

The Post first reported in April that the nation’s biggest cinema chain was in talks with law firm Weil Gotshal & Manges to explore a potential Chapter 11 filing.

The plan that’s close to being approved would let Silicon Valley-based investment firm Silver Lake, which owns $600 million of AMC debt and has a seat on the board, share in the collateral pledged to the firm as part of the restructuring. That plan was opposed by senior lenders, Apollo Global Management, Davidson Kempner Asset Management and Ares Management, the report said.

Despite the behind-the-scenes battle, what’s important for AMC is obtaining a cash cushion to help it weather the storm until the pandemic weakens and movie theaters can safely reopen.

Currently, US cinemas, which closed in mid-March, are not set to open until July 30 in most parts of the country. In the two biggest markets — New York and Los Angeles — there is no firm reopening date yet as the virus continues to spike nationally.