AMC Entertainment falls on plan of debt conversion into equity

Shares of theater chain AMC Entertainment Holdings AMC.N fall 3.9% to $2.98 in premarket trading

AMC says it will cut its debt by converting at least $143 million in exchangeable bonds into shares, with the potential to swap up to $337 million of debt into equity

Debt conversion into equity often leads to share price declines because it increases the number of shares in circulation, diluting existing shareholders

Co also says it will raise about $223 million in new funds from certain creditors in a bid to pay off some debt maturing in 2026

Under the agreement, certain creditors will drop their lawsuits once the deal is complete - company

As of last close, stock down ~22% this year