Even after accepting a debt plan that would extend the life of AMC Theatres into 2021, the chain is in danger of running out of liquid assets in the first quarter of next year, a new report states. The chain, which was already in rough shape before locations had to be shuttered to combat the Covid-19 pandemic, has been leading the charge to reopen theaters and to try and pressure movie studios to get as many films as possible on the big screen. Now, according to The Hollywood Reporter, things are looking bleak for AMC’s prospects beyond 2021’s reopening.
“Given our expectations for a high rate of cash burn, we believe the company will run out of liquidity within the next six months unless it is able to raise additional capital, which we view as unlikely, or attendance levels materially improve,” S&P Global said, reducing AMC’s credit rating.
The pandemic has hit AMC hard: the chain has been sued by landlords who say some locations have not been paying rent during the closure, and last estimates were that AMC Theatres had laid off 98.5% of its employees in a closure that may now last as long as four months (some early, optimistic projections had held the theatres might be able to open after six weeks of downtime). The company’s credit rating was downgraded at the start of this month, with some analysts predicting that AMC would not reopen at all, but more recently reports came out that the chain was talking with bankruptcy lawyers and working on a path forward that would allow the company to continue operations in spite of the hit it’s taking right now.