AMC Theaters said on Tuesday that its available cash resources would be “largely depleted” by the end of 2020 or early 2021 due to “the reduced level of the film for the fourth quarter” and the lack of a significant increase in attendance at current levels. “
The company said it has two ways out of its monetary crisis: Either more customers have to buy tickets, or they will have to find new ways to borrow money.
Getting seat covers turned out to be a big challenge. As of October 9, AMC reopened 494 of nearly 600 U.S. theaters with a capacity of between 20% and 40%. But AMC (AMC) does not fill the limited space it offers: Since the American theater market opened at the end of the summer, it has served more than 2.2 million guests. This represents a drop in attendance of 85% compared to last year.
Raising liquidity will not be easy without returning to normal business. Investigates additional debt financing, renegotiation with landlords and even potential asset sales. But AMC has thrown cold water at these options.
“There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the substantial amounts of additional liquidity that would be needed until the company manages to achieve more normalized levels of operating income,”
; AMC said.
Shares of AMC fell about 6% on Tuesday.
The news of the AMC crisis comes as the film industry struggles to survive the pandemic.
Cineworld Group, owner of Regal Cinemas, said last week that it would stop working in all its theaters in the United States and the United Kingdom as cases continue to spread. And there is an anemic return in the American box office, which has led studios to decide to slow down big movies.
Movies such as Marvel’s “Black Widow” and James Bond’s new title “No Time to Die” were moved the following year, while Pixar’s “Soul” was pulled completely from theaters to debut on Disney streaming service, Disney + .
Since closing in March, theaters have tried to reopen with health measures to help curb the virus. Yet the industry has failed to stand on its own two feet.
Despite these challenges, AMC said it would remain open. However, after the submission on Tuesday, we already know that this can probably only happen for a few more months.