AMC Theaters, the largest exhibition chain in the United States, has revealed that it might be forced into filing for bankruptcy due to the impact of the coronavirus pandemic.
To date, COVID-19 has forced AMC to close over 1,000 theaters with 600 corporate employees being laid off or furloughed. With no revenue coming in over several months, AMC Theaters says it expects a first-quarter financial loss of between $2.1-2.4 billion with the full report coming next week.
It also recognises that even when cinemas re-open, it’s likely customers will hesitate to come back. Then there’s complying with new health guidelines which will add to costs and cut into profits. With growing uncertainty, AMC told regulators today that:
“We may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time
We believe we have the cash resources to reopen our theatres and resume our operations this summer or later. Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases, and our ability to generate revenues.
We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain.”
AMC Theaters currently operates 996 theatres and just under 11,000 screens in 15 countries, with around two-thirds of those in the United States.
Source: Indiewire
