The curtain may be coming down on AMC Theatres, which was forced to shut down its business due to the novel coronavirus (COVID-19) pandemic, and is now facing bankruptcy troubles.
The cinema giant announced in mid-March that it would be closing down all its theaters for up to 12 weeks in coordination with federal guidelines and directives for social distancing in an effort to stop the spread of the virus.
According to a Variety report, MKM Partners analyst Eric Handler said that theaters could be closed until at least August, and “our belief that AMC lacks the liquidity to stay afloat until that time, we expect the company will soon be faced with filing for bankruptcy.”
The report states that AMC reported $265 million in cash and equivalents on hand, plus $332 million available via lines of credit, as of Dec. 31, 2019.
“AMC is the exhibition company we view with the least financial flexibility,” Handler wrote in his report. “We believe the company’s monthly cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June or July.”
COVID-19 has had a tremendous impact on the entertainment industry, with production on dozens of blockbuster movie openings and television shows shut down, canceled or delayed, and the nation’s 40,000 movie theaters going dark.
In a statement, AMC Entertainment CEO Adam Aron said “we are ever so disappointed for our moviegoing guests and for our employee teams … the health and wellbeing of AMC guests and employees, and of all Americans, takes precedence above all else. We will continue to monitor this situation closely and look forward to the day we can again delight moviegoers nationwide by reopening AMC movie theatres in accordance with guidance from the CDC.”
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