Pedestrians pass in front of an AMC movie theater in New York’s Times Square neighborhood.
Photographer: Amir Hamja / Bloomberg
Photographer: Amir Hamja / Bloomberg
Silver Lake Management has its equity stake in it AMC Entertainment Holdings Inc., which generated about $ 113 million after converting bonds to stocks and selling the stock as the movie theater chain’s stock recovered.
The private equity firm converted $ 600 million in 2.95% bonds into stocks at a price of $ 13.51 per share, according to a legal filing Friday. It then sold the 44.4 million shares for an average price of $ 16.05 during a Reddit-driven rally in the company’s stock, according to Bloomberg calculations. Gains announced on Friday do not include possible hedging offsets.
A Silver Lake representative did not immediately respond to messages asking for comment outside of normal business hours.
Silver Lake has provided millions of dollars in funding to the troubled theater chain in recent months as it struggled to survive the pandemic. The Menlo Park, California-based company was the largest holder of AMC’s convertible bonds due 2026.
Ever-risky debt investments are paying off Profits for some credit investors after day traders helped fuel the sudden surge in stocks in companies like AMC. The cinema company climbed a whopping 85% on Friday to $ 16, before closing at $ 13.26. Silver Lake sold its equity Wednesday and received a whopping $ 24.14 a share, according to the filing.
The move effectively cleared out $ 600 million in debt to the controversial theater chain.
Read more: AMC bolsters Silver Lake’s support to reduce debt and increase cash
AMC, based in Leawood, Kansas, has grown fresh cash in recent weeks as it tries to manage its debt burden and avoid filing for bankruptcy. Entertainment and leisure companies are among the companies hardest hit by the pandemic, as consumers choose to stay at home or are forced to do so by the government shutdown.