AMC says the cash may run out by the end of the year

Theatrical chain AMC may collapse completely by the end of 2020 and require “an additional source of liquidity or increased attendance levels” to survive, the company said in its financial statements on Tuesday.

The AMC writes that it expects cash reserves to be “significantly depleted” by the end of 2020 or early 2021 due to low attendance during the coronavirus pandemic and delayed movie release schedules. .. If they don’t change, and if AMC doesn’t seem to hold its breath, the company may pursue options such as additional debt and equity financing (which has raised $ 37.8 ($ 53 million) so far). It states that there is. Landlord, asset sale, or joint venture. However, the “these potential sources of liquidity that are needed to keep the company alive until movie fans return to the theater are not realized, or they are insufficient to generate a substantial amount of additional liquidity. There is a serious risk of being there, “he added.

As of last Friday, AMC reported that it had opened about 494 of the 598 theaters in the United States, but they operate 20-40% of the capacity and the total attendance was a year ago. It was only 15% of. The remaining 17% of the theaters that remain closed are in states such as California and New York, with some of the “company’s most productive” venues.

The last big theater release was by Christopher Nolan TenetEarned more than $ 300 million worldwide ($ 419 million), but domestic box office revenues were disastrous. This is a powerful indicator that US audiences are very cautious about returning to the theater until they are safe. According to CNBC, only four big movies will be released in theaters by the end of 2020. Croods: A new era, Free Guy, Cumming 2 America,and Wonder Woman 1984.. None of these films will be shown in theaters before late November and may be delayed again. Many movies are still out, but releases are moving to an on-demand or subscription streaming model rather than theater-first. The theater chain is further weakened by the end of the Paramount Consent Decision, an antitrust law designed to prevent production studios from over-controlling the way films are distributed.

Scientists predict that the coming winter will provide ideal conditions for the transmission of the coronavirus. Coronavirus propagates in crowded, poorly ventilated indoor spaces. This means that it is likely to be a catastrophic season for a pandemic. The University of Washington Institute for Health Metrics estimates that the current number of deaths in the United States will skyrocket from about 215,000 as of October 13 to about 395,000 by February 21.

California allowed some theaters to reopen, but at a slower pace, CNBC reported separately. Theater operators pressured New York State to relax restrictions and closed all but two of the 300 theaters. Movie studios are very likely to postpone indefinitely until the release schedule changes. chief analyst Shawn Robbins told the network that New York City and Los Angeles not only account for 10-15% of box office revenue, but also drive “advertising blitz” in the film industry.

According to CNN, competitor Regal Cinemas has also revealed that in the event of a “long-term” shutdown in the winter, new funding will be needed by early 2021. Last week, it announced that it would suspend operations in the US and UK for the time being.

“We’re like a grocery store without vegetables, fruits and meat,” Regal owner Cineworld CEO Mookey Glider told The Wall Street Journal. “We cannot operate for a long time without our products.”

Cinemark, the third largest theater chain, says it plans to take strict safety measures to keep it open (about 80% of theaters continue to operate). In addition, as of July 31, the cash balance is 525 million dollars (733 million dollars), the burning rate is about 50 million dollars (70 million dollars) a month, 2021 without hitting the wall He said there was plenty of room for inertia until the year.

Editor’s Note: The release date for this article is based in the United States, but will be updated with local dates in Australia as more details become available.

AMC says the cash may run out by the end of the year

Source link AMC says the cash may run out by the end of the year

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