AMC Entertainment Holdings is examining a host of alternatives that include a possible bankruptcy filing to loosen its financial burden as the coronavirus crisis prevents customers from going out and watching movies and studios from providing the flicks.
The world's biggest movie theater chain - which runs almost 600 cinemas in the U.S. and another 358 overseas through joint ventures - said a lack of new movie releases and the closing of markets like California and New York had left it bleeding cash and uncertain about when revenue might return to previous levels.
AMC's stock price was down almost 13% Tuesday, just moments after the country's biggest movie group warned it could end up financially depleted by the end of the year. The stock has shed 50% of its market value so far this year as a result of the pandemic.
AMC lenders have conducted initial discussions about helping the movie-theater firm financially if it pushes through with its bankruptcy filing, sources with knowledge of the matter disclosed. The fresh cash would help keep the company functioning while it makes a recovery plan, the sources said.
Based on regulatory documents, AMC said there's a major risk that potential sources of funding will not materialize or that they won't be enough "until the company is able to attain more normalized levels of operating revenues," Business Insider quoted the company as saying in its filing.
AMC warned that the already scant movie lineup may get even sparser since certain rivals have announced the re-closure of their own movie houses this month in the face of an ongoing global health crisis.
Around 494 of AMC's 597 cinemas are still operating. However, the remaining 17% - which include locations in Maryland, North Carolina, California, and New York - accounted for nearly 25% of sales in 2019.
