AMC secures $100 million funding, but bankruptcy concerns still loom

Street performers in Minnie Mouse costumes go in entrance of an AMC movie show at evening within the Times Square neighborhood of New York, Oct. 15, 2020.

Amir Hamja | Bloomberg | Getty Images

The largest theater chain on the planet simply bought a $100 million shot within the arm.

On Friday, AMC stated Mudrick Capital Management had agreed to take a position the sum to assist the cash-strapped movie show chain survive the continuing coronavirus pandemic.

The cinema chain will still want a minimum of $750 million of extra liquidity to fund money necessities by way of 2021.

“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 stated in a regulatory submitting.

Shares of the corporate have been down 1% in premarket buying and selling Friday.

The firm estimated its money and money equivalents amounted to about $320 million as of Nov. 30, and with out extra liquidity, its current money assets can be depleted throughout January.

“A significant spike in coronavirus cases, together with delays of major movie releases or the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, have led to theatre closures, prevented the opening of theatres in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theatre attendance levels and our business,” AMC stated.

The cinema chain immediately cited Warner Bros.’ latest resolution to launch its total 17-movie slate on its streaming service HBO Max and in theaters similtaneously a significant concern. It additionally stated it nervous that different studios would observe swimsuit.

AMC is at present working round 400 of its almost 600 theater areas with restricted seating capacities and with restricted hours. Theaters in New York City and components of California stay shuttered.

The firm reported that from Oct. 1 to Nov. 30 general attendance at its U.S.-based theaters declined 92% in contrast with a 12 months earlier.

AMC is within the means of making an attempt to renegotiate its lease funds with landlords and is looking for reductions, abatements and deferrals.

Should the corporate not be capable to safe extra sources of liquidity, it reiterated, it might should enter bankruptcy proceedings.

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