AMC Theatres may still have to shutter its locations?
AMC and bankruptcy are like the Ross and Rachel of the film exhibition industry. One day you expect them to get together and the next day they’re on a break. That was the case last spring when it seemed inevitable that AMC Theatres would have to file for bankruptcy. But, against all odds, they avoided it by raising $500 million in new debt. The hope was to put this off for as long as possible — until COVID-19 ran its course and audiences returned.
Sadly, it looks like things are starting to get even glummer for AMC Theatres. In fact, it seems like they may be getting back together with their “will-they, won’t-they” squeeze soon enough. The report comes from Variety, who states the ongoing pandemic could lead to bankruptcy. This would mean shuttering its over 1,000 theaters. So, what’s changed in recent months?
Well, reality seems to be kicking in. While theaters are already planning reopening, the fact is people may not return in droves. Between the fears of COVID-19, health guidelines, and few movies to draw them in, audiences may still opt to stay home. To make matters worse, AMC Theatres expects to report a loss of $2.1 billion to $2.4 billion in its first quarter.
“We believe we have the cash resources to reopen our theatres and resume our operations this summer or later,” the company wrote. “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.”
So, is bankruptcy a sure thing for AMC Theatres? Not yet. But, as with all things these days, the future is unpredictable.
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