The movie chain AMC Entertainment, which last year pushed to the brink of bankruptcy Coronavirus pandemic, said Monday its doors will remain open in 2021, thanks to a $ 917 million cash infusion.
“This means that any conversation about an impending bankruptcy for AMC is completely off the table,” CEO Adam Aron said in a statement.
More than half of the new funding, $ 506 million, comes from investors who bought shares in AMC during the company’s stock offering in December, the company said. The remaining amount comes from a $ 411 million line of credit that AMC obtained through its European subsidiary, Odeon.
AMC expects the $ 917 million to keep its operations afloat until 2021. The company will arrive until 2021, if filmmakers return to theaters and if landlords are willing to reduce rent payments, officials said. ‘AMC in a regulatory dossier.
Millions of additional funding means “the sun is shining on AMC,” Aron said. The CEO also acknowledged that the rate of deployment of COVID-19 vaccines will ultimately decide the fate of the company.
“We will need a large portion of the general public in the U.S. and abroad to be vaccinated,” Aron said. “To this end, we thank the medical communities around the world for their heroic efforts to thwart the COVID virus.”
Movie theaters have been paralyzed by COVID-19 over the past year, as the locations of the country’s major markets, Los Angeles and New York, remain closed, while those operating operate are forced to limit seats to 50% of their capacity to keep moviegoers socially distant. each other.
AMC, Cinemark, Regal and other theaters are also reporting a drop in revenue, as many of the most anticipated blockbusters of the year have been postponed or launched on broadcast services. Film companies saw their revenue fall by more than 75% last spring and the summer, according to data from the Motion Picture Association, Directors Guild of America and National Association of Theater Owners.
Assistance close to zero
Attendance and revenue drops at AMC cinemas in the United States reached 92% at the end of the third quarter of last year, leading the company to predict that it would he runs out of money at the end of 2020.
Fourth quarter figures were no better. AMC recorded a 92.3% drop in U.S. attendance in the fourth quarter, compared to the same period last year, according to a recent SEC filing. As of that time, AMC operated 438 of its 593 U.S. open locations with limited seats and burned approximately $ 125 million a month to do so, according to the filing.
With the new funding, AMC bought long enough to see if President Joe Biden’s commitment to increase vaccine launch to 100 million people over the next 100 days would be successful, said Michael Pachter, an analyst at Wedbush Securities . Pachter said he expects a large return of audience members to U.S. theaters this summer, if most Americans are vaccinated before spring.
“And film studios would make sure we had a great movie to watch every week,” he said.
Those who have recently invested in AMC are also betting on movie theaters to roar again once the fear of catching COVID-19 is removed, Pachter said.
“Someday there will be movies in the theater and we will see them in the same theaters as before,” he said.