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EXCLUSIVE: The nation’s largest theater chain AMC Entertainment is finalizing a deal with bondholders that would slash debt by up to $600 million, bring in $200 million in fresh cash and give it a lifeline into 2021, Deadline has learned.
A $500 million bond sale in April as the coronavirus kicked the nation’s economy into a ditch was meant to fund the exhibitor’s seriously-cash strapped operation through November. The Kansas-based company led by CEO Adam Aron is now approaching four months of zero revenue since shuttering theaters in March. It plans to open them on July 30 even as COVID-19 cases spike in states across the country and the summer release schedule was already shuffled several times.
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There’s been some drama around the restructuring, which would see big private equity firm and current AMC bondholder, Silver Lake Partners, shifting into a higher grade of company debt called first lien. That has rankled other first lien holders including Apollo Global Management, Ares Management, Davidson Kempner Capital Management and Eaton Vance.
They would see their positions diluted.
Never have boring bonds in their various forms, which ususally hide in the background of business coverage, been as crucial as they are today in getting companies through the COVID-19 crisis.
A flurry of negotiations has resulted in AMC extending the deadline for a subordinated debt exchange several times. That exchange, key to the restructuring, calls for existing holders of subordinated notes (or bonds), which have traded as low as 20 to 30 cents on the dollar as AMC’s prospects dimmed, for new securities the company is offering at 65 to 72.5 cents on the dollar.
So these bondholders would still take a haircut. But the interest rates are higher and their new bonds, called second lien, are a step above subordinated in the pecking order of who gets paid back in the event of a bankruptcy.
The second lien bonds, however, would stand above Silver Lake securities and that gave the firm the right to veto the exchange. That’s because Silver Lake’s original agreement with AMC when it purchased $600 million in debt in 2018 stipulated that no new debt could be ‘layered’ above its own. As a result, Silver Lake’s debt is being upgraded to first lien so the exchange can proceed.
The exchange will lower AMC’s overall debt, which stands at a hefty $5.8 billion, and, consequently, its debt repayment obligations.
Silver Lake has also agreed to postpone by two years, to 2026 from 2024, AMC’s obligation to repay the $600 million.
Fresh cash will come from a separate sale of $200 million in AMC bonds to subordinated bondholders.
The first lien bondholders have offered to buy an additional $200 million in debt, which would result in a total $400 million of fresh cash. However, that move would not be possible under Silver Lake’s agreement with AMC.
Silver Lake has a seat on AMC’s board and a person close to the first lien bondholders said they feel the firm is getting preferential treatment and not acting in the company’s best interest.
Another person close to the situation, however, said Silver Lake had recused itself, that AMC is conducting negotiations with all classes of bondholders separately and in private and that Silver Lake is considering the best interests of AMC.
AMC Entertainment shares have been buoyant over the past few days on anticipation of the restructuring. On Thursday they rose another 3.16% to $4.57.
It’s a weclome uptick. As AMC and other theater operators struggle with the global pandemic, their stocks have been battered. Takeover speculation has also bubbled up. In May, Amazon was rumored to be eyeing AMC. Yesterday, A BofA Securities analyst reiterated a thesis that a theater chain buyout by either Amazon or Netflix makes sense.
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Angelica Rosas McDaniel, the former head of daytime programs at CBS, has joined Litton Entertainment, a leading producer of daytime educational and informational programming, as its new EVP, Strategy. In her new role, McDaniel will be involved in all aspects of the company’s operations, from original productions to syndication and digital strategy. She also will work with content executives at Litton parent Hearst Television on strategic initiatives. She begins her new job on September 1.
“I’ve known Angelica for eight years and there could not be a more opportune time for her to join Litton,” said Dave Morgan, Litton Entertainment president and CEO. “She’s distinguished herself as not only an innovator but as a visionary in championing programming that empowers women, promotes racial diversity and resonates with parents and educators. She’s the ideal executive to help us execute on our aggressive plans to grow in a dynamically evolving video marketplace.”Related Story Andy Samberg's 'Palm Springs' Makes A Splash, Natalie Erika James Makes Haunting Directorial Debut With 'Relic' - Specialty Streaming Preview
In her most recent position at CBS, McDaniel oversaw the network’s daytime lineup, where she launched the Daytime Emmy-winning The Talk. She also oversaw the 2013-2014 season rebranding of CBS’s Saturday morning programming block, now named “CBS Dream Team… It’s Epic!” and featuring award-winning Litton programs including Lucky Dog, Innovation Nation and the 2020 Daytime Emmy-nominated Mission Unstoppable, among others.
“Litton Entertainment has a well-deserved reputation for outstanding, high-quality programming,” McDaniel said. “I admire their dedication to creating compelling, prosocial content and I’m excited to be joining the talented team. The company’s strong relationships and credibility with the leading broadcast networks and other major linear and digital distributors are a direct result of its commitment to excellence. This should position us well as we work to bring Litton’s trademark success to even more audiences across additional platforms.”
In today’s TV News Roundup, CBS Entertainment announced it is merging its alternative programming and specials departments, and Hulu announced the premiere date for its upcoming comedy series “Woke.”RENEWALS
Nickelodeon has greenlit a 20-episode second season of its animated series “It’s Pony,” which follows the adventures of a young girl and a carefree pony. The second season will premiere in 2021. The show holds one of the top three animated series with Kids 2-11 across all TV, behind only Nickelodeon’s “SpongeBob SquarePants” and “The Loud House.”DATES
Hulu has announced its upcoming comedy series “Woke” will premiere on the streamer on Sept. 9. The series follows a Black cartoonist (Lamorne Morris) on the verge of mainstream success. Marshall Todd and Keith Knight serve as co-creators and executive producers alongside showrunner Jay Dyer, Maurice “Mo” Marable, Aeysha Carr, Richie Schwartz, John Will, Will Gluck and Eric Christian Olsen. Kate Schumaecker served as executive producer on the pilot. The comedy is a co-production between ABC Studios and Sony Pictures Television Inc. Watch a teaser below.
Netflix has announced its reality dating series “Indian Matchmaking” will premiere on the streamer on July 16. The eight-episode season features matchmaker Sima Taparia guiding clients through the arranged marriage process. Watch a new trailer for the series below.
HBO Max has announced unscripted series “The Dog House: UK” will premiere on the streamer on July 23, earlier than originally announced. All eight episodes will become available to watch at once. The series follows a rural British animal rescue center’s commitment to matching dogs with owners. The show was originally produced by Five Mile Films for Channel 4 in the UK for distribution by All3media International.FIRST LOOKS
Netflix has released a trailer for Jack Whitehall’s upcoming hour-long stand-up special. “Jack Whitehall: I’m Only Joking” features the comedian telling stories about his father, recounting experiences traveling and interacting with the audience. The special premieres on the streamer on July 21. Watch the trailer below.GREENLIGHTS
Fuse Media will bring its digital original series “Like, Share, Dimelo” to its flagship linear channel. The talk series will premiere on Sept. 21 and feature Darlene Demorizi and Sasha Merci as hosts, exploring topics in Latinx culture. The show had launched in April as a short-form digital series.PROGRAMMING
VENN has unveiled the first part of its programming and broadcast talent, debuting live on Aug. 5. The channel will launch in beta with over 20 hours of programming per week, with plans to expand to more than 50 hours in 2021. Some of the series that are part of the network launch include “VENN Arcade Live,” “Dare Package,” “Guest House,” “The SushiDragon Show” and “Looking for Gains.” More shows will be announced next week.EXECUTIVE NEWS
CBS Entertainment has combined its specials and alternative programming departments, setting longtime CBS vet Jack Sussman to oversee the merged unit and Mitch Graham to oversee alternative, reporting to Sussman. The move follows the recent departure, several months ago, of senior vice president of alternative Sharon Vuong.
Litton Entertainment has named Angelica Rosas McDaniel as executive vice president of strategy, effective Sept. 1. McDaniel’s responsibilities will involve all aspects of the company’s operations from original productions to syndication and digital strategy. She will also work with content executives at Litton Entertainment’s parent Hearst Television. McDaniel had been serving at CBS overseeing the network’s daytime lineup.LATE NIGHT
Tonight, Billy Porter and Kim Petras will appear on “Jimmy Kimmel Live!” with special guest host Billy Eichner.