Movie goers purchase automated tickets at an AMC movie theater in Arcadia, California on Aug 2, 2017. (FREDERIC J. BROWN / AFP)
Chinese billionaire Wang Jianlin’s AMC Entertainment Holdings Inc is considering an initial public offering of its European cinema operations in a deal that could raise hundreds of millions of dollars.
AMC, which is majority owned by Wang’s Dalian Wanda Group Co, would consider selling a quarter to a third of its European unit, executives at the top US movie-theater chain said Monday on a conference call with investors after reporting third-quarter results. The funding could help AMC reduce its US$4.29 billion in borrowings, accumulated as the company made acquisitions around the world.
AMC is adjusting to a new reality after its shopping spree was derailed by the stumbling US box office
“We are currently seriously exploring the idea of an IPO of our European theaters on the London Stock Exchange sometime between July of 2018 and April of 2019,” Chief Executive Officer Adam Aron said on the call. “We’ve intentionally structured the Odeon and Nordic to run as a wholly owned but independent subsidiary of AMC so this should be something - a public listing in Europe - that can be readily accomplished.”
AMC is adjusting to a new reality after its shopping spree was derailed by the stumbling US box office. For Wanda, raising funds outside of China would be relief. The property-to-entertainment conglomerate has struggled to take money out of China after the government there began clamping down on capital outflows to protect the currency from depreciating and to stop what it calls "irrational" investments.
Leawood, Kansas-based AMC, the largest operator of cinemas in the US, had been expanding through acquisitions such as the late 2016 purchase of Odeon& UCI Cinemas for US$1.2 billion and the US$929 million takeover of Nordic Cinema Group this year.
Shares of AMC fell as much as 11 percent to US$10.90 in extended trading. Fueled by acquisitions, third-quarter revenue rose to US$1.18 billion, beating the US$1.16 billion average of analysts’ estimate. The company reported a loss 33 cents a share.
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