AMC is drowning in a pool of debt after a tumultuous year. The theater chain who previously stated it will run out of cash by the end of this year now says it needs to raise $750 million “to remain viable” through 2021.
AMC has filed with the SEC to sell up to 200 million shares as a way to liquefy some assets into cash. So far, the nation’s biggest theater chain announced it’s raised $100 million in a debt sale to Mudrick Capital Management in exchange for around 13.7 million AMC shares.
The exhibitor’s cash burn was about $125 million during October and November, meaning that’s the amount of money it takes just to stay up and running. The company only had $320 million in cash as of Nov. 30, so it’s clear that the company in is a dire situation. While 404 of its 594 US theatres were open as of last month, the attendance during October to November 30 was 92% declined from the same timeframe last year.
In order to stay afloat, AMC estimates it needs the first part of 2021 to see attendance rise to approximately 20% of pre-COVID 2019 levels, and reach 85% of pre-COVID 2019 attendance levels by the last half of 2021. With WarnerBros and now Disney both announcing major changes in the box office releases, AMC’s future is looking fairly bleak.
“We cannot predict what supply of movie titles will be available for theatrical exhibition once moviegoers are prepared to return in large numbers,” AMC said. “Nor can we know with certainty the impact of the Warner Bros. announcement or any similar announcements regarding the release of movie titles concurrently to the home video or streaming markets, as those arrangements will be subject to negotiations that have not yet taken place.”
Earlier, WarnerBros announced that all of its 2021 releases would also be released on HBO Max concurrent with their theater releases, which doesn’t create much incentive for people to head to the theater when they can stream new movies from the comfort of their own living room. Disney also announced that a mix of its new 2021 releases would also head straight to streaming on Disney+.