Ushered out

5 Sep 2013 By John Foley Follow @johnsfoley

The debt-laden cinema chain has filed for an IPO just a year after the Chinese owners bought it. AMC needs to reduce its borrowings in order to meet ambitious investment plans. In return for helping out, investors get shares with few votes and few rights. It’s a poor showing.

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AMC Entertainment filed for an initial public offering in New York on Aug. 30, a year to the day after being bought by Chinese real estate group Wanda. The cinema chain is the second largest in the United States, with 343 theatres at the end of June and attendance of 198 million in the prior 12 months.
The IPO would consist of shares with one vote each, while Wanda would hold shares with three votes each. The proportions were not given in the filing, but Wanda would continue to control a majority of the voting power of the company after the listing. A provisional target of $400 million was given, but only for reference.
AMC said that it would use the proceeds for “general corporate purposes”, but added that it had no specific plans on how to spend the funds. The company had $2.2 billion of total borrowings at the end of June.
Dalian-based Wanda purchased AMC for $2.7 billion from a consortium of private equity funds in August 2012, including JPMorgan, Apollo Management, Bain Capital, Carlyle Group and Spectrum Equity Investors. Of the purchase price, $2 billion was accounted for by AMC’s net debt.

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