Additional $550 Million Needed to Pull Through
The largest movie theatre chain in the world managed to secure only about $200 million of the $750 million it needed for the company, according to Aron.
“We need to raise more, but we’re working hard to do that and we’ve laid out a plan and a blueprint to get there,” he said. “Whether we get there or not, only time will tell.”
The company’s stock collapsed this year during the coronavirus pandemic and investors had no confidence in the recovery of the cinema theatre industry. AMC’s stock plunged over 70% in 2020.
“Given the uncertainty regarding our ability to raise material amounts of additional liquidity and the uncertainty as to the time at which attendance levels might normalize, substantial doubt exists about the company’s ability to continue as a going concern for a reasonable period of time,” AMC previously said in its regulatory filing.
Following the coronavirus outbreak in spring, movie theatre businesses were forced to shut down and remained closed for more than six months. Right now, 400 out of 600 AMC’s theatres are operating, with restricted seating capacity and reduced working hours. Certain theatres in California and New York City are still closed.
AMC is in negotiations with its landlords in a bid to reduce rent payments and seek abatements and deferrals. If the company fails to raise additional funds, it may have to declare bankruptcy.
The theatre chain cannot apply for grants from the $15 billion Save Our Stages Act, given that it’s a publicly-traded company with theaters across more than ten states.
Upon the coronavirus outbreak, AMC already had almost $5 billion in debt, accumulated from acquiring competitors including Carmike and Odeon and equipping its theatres with luxury seatings.
The company has managed to negotiate its debt and slightly strengthen its balance sheet after receiving a $100 million investment from Mudrick Capital Management.
“We have our work cut out for us,” Aron said. “We do need to raise more money to get to the other side. Having said that, we’ve done that four times already, and that’s our focus.”
AMC’s CEO Adam Aron said his company secured only $200 million of $750 million it needs to survive after taking a critical hit from the coronavirus pandemic during 2020.
About the Author
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.