AMC stockholders today overwhelmingly approved a pair of provisions that would dramatically enhance the company’s ability raise fresh cash by issuing and selling shares and boost the price of the company’s shares in a ten-for-one-reverse stock split.
The approval at a special meeting of shareholders help virtually would also trigger the immediate conversion of AMC Preferred Equity Units, or APEs, into common shares.
The only rub is that that the measures can’t be implemented yet since there’s a suit pending in Delaware court by an AMC shareholder seeking to block them. A judge has set an April 7 hearing date to rule on a preliminary injunction on that.
“We will vigorously oppose claims made in Delaware Court of Chancery that we are not folowwing the will or our shareholders,” AMC CEO Adam Aron said at the meeting. “Your vote today sends a very strong signal that we are doing exactly as you wish.”
Some 80% of votes cast approved an amendment to the giant theater chain’s certificate of incorporation to increase the share authorization of common stock to 550 million shares. Some 87% of votes cast backed the 1-for-10 reverse stock split.
“I would like to commend our shareholders for the wisdom exhibited in your vote by approving these proposal and doing so by such wide margins,” Aron said. “The surest way to combat naysayers and prophets of doom is to keep our cash reserves robust.”
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