The sunbeds are lined up in front of an indoor movie theater during the global coronavirus outbreak (COVID-19) in Santa Monica, California, USA, March 16, 2020.
Lucy Nicholson Reuters
Shares of AMC collapsed on Wednesday as investors tried to assess the likelihood of bankruptcy.
On Tuesday, the world̵
AMC CEO Adam Aron said in an interview with Bloomberg News on Tuesday that his efforts were focused on raising new money to overcome it until the coronavirus restrictions were eased and movie schedules were normalized. However, a separate report by the media company on Tuesday said potential bankruptcy was an option to ease the company’s debt burden. This report cites people who know the subject.
According to Bloomberg, these people said that no official proposal had been submitted to AMC.
Shares of AMC fell more than 18% on Wednesday, falling below $ 3 per share. Shares of AMC, with a market value of $ 387 million, have fallen about 60 percent this year. Recently, the shares were reduced by about 14%.
A company spokesman told CNBC on Wednesday that AMC was not preparing for bankruptcy or was negotiating bankruptcy with lenders, calling the report “fake.”
AMC has been focused on raising funds for months. The film chain has already renegotiated its debt to improve its balance this year and is exploring several ways to acquire additional sources of liquidity. He is also trying to come up with ways to increase attendance levels, which have fallen by 76% from last year.
The company said Tuesday it was seeking additional debt and equity financing, renegotiation with landlords over leases, possible asset sales, a joint venture with an existing business partner and investments in minority shares in its shareholder.
Much of AMC’s financial problems stem from a lack of returning customers and a limited number of new film releases.
Blockbuster movies have been repeatedly postponed until 2021 or switched to streaming services. “Coming 2 America” will now move to Amazon Prime Video, leaving only three major films of 2020: “The Croods: A New Age”, “Free Guy” and “Wonder Woman 1984”.
In addition, AMC misses potential revenues from countries that have higher ticket prices and a high concentration of movie buffs due to continued restrictions on theater operations.
In its public submission, AMC said it had managed to reopen 494 of its 598 American theaters, but only with limited capacity of 20% to 40%. The other 104 theaters are in California, Maryland, New York, North Carolina and Washington. These theaters, although only about 17% of the company’s total footprint, accounted for nearly a quarter of the company’s total revenue last year.
The AMC said it was in talks with local and government officials from those states, but there was no clear time when those places would be reopened.