AMC - National CineMedia stock doubles on preplanned bankruptcy filing

2023-04-12 11:33:44 ET

Stock in cinema advertising chain National CineMedia ( NASDAQ: NCMI ) -- at penny levels for most of the past year -- jumped 124% Wednesday on heavy volume after its filing for bankruptcy.

National CineMedia LLC filed the Chapter 11 petition in Texas, while National CineMedia Inc. ( NCMI ) will remain the manager of NCM LLC.

The company has estimated liabilities of $1B-$10B against assets of $500M to $1B. Its market cap has jumped to nearly $58M.

It's entered into a comprehensive Restructuring Support Agreement that completely delevers the balance sheet, converting debt into new equity.

And NCMI will receive an ownership interest of about 14% in the restructured NCM LLC, vs. a current 48%. (Regal parent Cineworld ( OTCPK:CNNWQ ) and Cinemark ( CNK ) had owned the remainder of NCM LLC; AMC Entertainment ( AMC ) -- which had been bought out of NCMI by Cineworld and Cinemark in 2018 -- just disclosed a new 9.1% passive stake in the cinema advertiser.).

“We are entering this process with the overwhelming support of our secured lenders and key stakeholders, which we expect will enable us to swiftly and responsibly emerge as a stronger company," said NCMI CEO Tom Lesinski.

The company says it will operate the business without disruption, noting existing cash balances offer the liquidity needed to keep up.

It also says it expects to report total revenue growth of 44.4% to $91.7M in the fourth quarter, along with operating income jumping 251% and operating income before depreciation/amortization rising nearly 130% to $42.1M. Lesinski pointed to the success of Black Panther: Wakanda Forever and Avatar: The Way of Water to wrap up 2022.

NCMI ( NCMI ) said in late March that it would file its annual report late due to talks with its lenders .

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